Bill C-18 (Historical)

An Act respecting equalization and authorizing the Minister of Finance to make certain payments related to health

Budget Implementation Act, 2004

[Pierre Paquette, Bloc, Joliette, QC]

Madam Speaker, 20 minutes to comment on Bill C-30 is quite a lot. On the other hand, 20 minutes to comment on the budget and this government's financial management is not much.

In Bill C-30 we find elements related to equalization, and I shall look at those in particular. We also find elements related to the Canada Pension Plan, with which we agree, and elements related to the GST rebate for municipalities, with which we also agree.

However, we are worried about the fact that the health and education sectors were not included in the Liberal government's new approach. And in fact, we know the reason well. It is simply an election strategy; they are seeking to create an alliance above the provinces, above Quebec, in order to be able to get around provincial jurisdictions.

The final element is one which relates to extended deadlines, permitting the Canada Customs and Revenue Agency to recover unpaid taxes over a 10-year period, and we agree with this as well, with the exception of the air security tax. We are opposed to this tax, whose need has not yet been demonstrated, unless it is to increase the already large, indeed amazing, surpluses of the federal government.

Looking at equalization in particular, it clearly illustrates the approach of this government. Whether headed by former Prime Minister Chrétien, or the new PM and former finance minister, when it comes down to it, their approach to real problems involves only cosmetic measures that do not solve the underlying problem. Instead, they increase it by giving the impression to Quebeckers, and to Canadians, that they are trying to respond to their concerns, yet this is totally false.

As far as the overall budget and the overall policy of this government is concerned, their approach is to increase Ottawa's power over the provinces, and particularly over the Government of Quebec.

Looking at the equalization formula proposed in Bill C-30, we see first of all that the new formula does not in any way respond to the concerns and needs that have been made clear on a number of occasions by the provinces, Quebec in particular.

Then, as far as the overall transfer of funds from the federal government to the provinces is concerned, we can see that it resolves nothing whatsoever. These continue to decrease year after year.

Finally, and this makes no useful contribution to the debate on fiscal imbalance, we see that there is too much money in Ottawa for the responsibilities the federal level has under the Constitution, and not enough in the provinces, and in Quebec in particular, particularly for health, but also for education and social housing.

Not only does this equalization formula resolve nothing, it also takes away, for the next five years, money from those who are institutionalized. Through the Minister of Finance and the Prime Minister, the federal government has made a unilateral decision to impose this equalization formula on the provinces.

There is something totally aberrant about our having had to vote on Bill C-18 only a few weeks ago, to extend the present equalization formula for one year, supposedly to maintain payments during the negotiations with the provinces. So we voted on that bill—Bill C-18 if I recall correctly—and then, on March 24, along they came with a budget including a unilaterally imposed formula.

This is another example of the government's incompetence, of the fact that the Prime Minister, the Minister of Finance and this House cannot make a decision. A few weeks ago, they probably really thought that they could reach an agreement with the provinces and Quebec before the election. They saw that the provinces were standing up and that Quebec had demands that it wanted the federal government to meet. Mr. Séguin, Quebec's Minister of Finance, repeated it when he tabled his budget, shortly after the federal government had done the same thing; if memory serves, this was on March 30. When the federal government realized that it could not easily impose its views on the provinces during negotiations and that an election was coming, it decided to unilaterally impose its formula for the next five years.

This decision alone is totally unacceptable. The Prime Minister talks about the democratic deficit. This is a perfect example. The federal government did not care at all about the provinces and it did not negotiate seriously. It did not take into consideration the provinces' needs and demands; instead, it unilaterally imposed its own vision. As I said, this alone makes Bill C-30 unacceptable to the Bloc Quebecois.

The federal government did not at all take into consideration the concerns of the provinces. Most of the changes made by the Minister of Finance, the Prime Minister and the Liberal government of Canada are cosmetic.

The government also did not take into consideration the unanimous proposal made by the provinces, whereby the equalization formula should be based on the performances of the ten provinces, as opposed to those of five provinces, as is currently the case, since this formula excludes one rich province, with the result that Quebec is losing several hundred millions, if not a few billion dollars.

This should have been taken into account, as was the case in the past. This is not something new. For several years, the federal government's equalization formula was based on all ten provinces. It is probably when this formula began to benefit the provinces and Quebec, as it should, that the federal government changed the rules of the game to ensure that it would not have to pay too much money in these areas of responsibility.

Property tax was not considered an element of the tax base as it should have been. In the budget, it was suggested that property value would be taken into account when determining the wealth of the various provinces. In British Columbia, property value is extremely high. So, that would have a huge impact on Quebec. It would mean somewhere around $400 million in equalization.

Therefore, it was suggested that property value would be taken into account. That would be the case, for instance, in British Columbia. However, public servants who appeared before the Standing Committee on Finance told us that it would not really be done that way since experts—probably friends of the government—had argued that the value market could not be factored in, as it would lead to bias, distortions, and things like that. So, a halfway compromise was reached, but, in reality, absolutely nothing was solved.

I hope B.C. residents are shocked to realize they were used in that way. In Quebec, we are shocked because our demands and requirements were not met. Whichever way you look at it, Quebec stands to loose over $1 billion. Not only have we lost $1 billion, but we will continue to lose money through transfers.

Let me give the House some figures to illustrate what is really going on. In 2001-02, Quebec's equalization payments totalled $4.690 billion. In 2002-03, they decreased to $3.985 billion, as seen in the budget plan, a $705 million drop. In 2003-04, we are down to $3.802 billion, after another drop of $183 million. In 2004-05, we will get $3.761 billion, and that includes the $150 million in fiscal rebalancing the government has announced in the budget, which is the only real increase. In fact, it is not an increase at all, but a reduction of the decrease Quebec feared. So, for these three years, we are expecting a reduction of close to but not quite $1 billion in equalization payments from the federal government to the Government of Quebec.

Compared to the October 2003 estimates, however, these figures tell the whole sorry tale. In October 2003, transfers to Quebec were estimated at $4.662 billion, as I said, but now they are estimated at $3.985 billion, a $677 million decrease in one year.

In 2003-04, in October 2003 to be more specific—less than five or six months ago—Quebec expected to get $4.525 billion in transfers. Now, according to the budget plan, we are down to $3.802 billion, a $723 million drop.

We should accept this? That is impossible. For people who defend Quebec's interests, it is impossible to accept this. This year, with the shenanigans that the government has announced—the cosmetic part—there is a slight increase of $70 million, but, once again, this is compared to a decrease of $41 million. Thus, the government simply alleviated the decrease, thinking it would distribute a goodie to the provinces, and to Quebec in particular. In total, from 2002 to 2005, the decrease will be $1.330 billion. This is totally unacceptable.

The parliamentary secretary tells us that equalization increases and decreases, depending on economic times. The problem is, this is the only existing formula that takes the needs of the provinces into account.

In the past, the federal transfer was mostly based on the needs and investments of the provinces. For example, the Canada assistance plan ensured that, for every dollar put in by Quebec, the federal government would put in a dollar. Since we had—and still have—poverty problems that were slightly higher than the Canadian average, Quebec would be imaginative and invest based to its people's need. The federal government had to follow; it was the rule.

The federal government changed the rules of the game with the Canada social transfer. Now, it is not based on the needs, but on the percentage of the population. Consequently, whatever amount is transferred to the provinces, Quebec is always receiving a little less than 25%.

Within the Canadian federation, equalization is the only way to take the needs of the provinces into account. However, we told you that the formula is inadequate. The provinces, particularly Quebec and the Minister of Finance of Quebec, said this several times. The federal government cannot deny it. Even recently, I believe that Minister Couillard said that the fiscal imbalance problem was a parasite in the relations between Quebec and Ottawa. This is the reality. Liberals can turn a blind eye and put their heads in the sand, but Quebeckers are not fooled by this situation.

If equalization does not meet the provinces' needs, the formula will have to be reviewed. At present, the transfers for health and social programs are not in keeping with the needs. They are calculated on a per capita basis, and that is that. That is the greatest injustice in the year we have just completed.

On one hand, the federal government makes a lot of fuss about announcements it has already made three times. It is like the case of highway 175—and they think we are fooled. The Prime Minister is holding off the election call so he can make announcements that have already been made. We have heard that they will be going to the Chicoutimi region, probably, I suppose, to help the hon. member for Chicoutimi—Le Fjord, who must be in serious difficulties. They will announce again, for the third time, the investment in highway 175. It has already been announced by Mr. Chrétien and by Mr. Landry. They think that people will not see it is all a flimsy fabrication. Probably they will do the same thing for highway 30. I am just waiting for that. The election call has been delayed so they can announce again the things that have already been announced three or four times.

That $2 billion in transfer payments to the provinces promised by Mr. Chrétien, which the former minister of finance pretended not to be able to give, just like the new Minister of Finance, in order to set the scene economically and financially to enable the new Prime Minister to announce it, has finally been announced. It has even been passed in the House, finally. Thus, $2 billion in transfer payments will go to the provinces, on a per capita basis. Quebec will receive a little under 25% of that, around $460 or $470 million.

At the same time, we are told that, for the same period, there will be $2 billion less in equalization. They would have us believe that they have taken $2 billion away but that the same amount will be given back in transfers. Now look: Quebec receives half of the equalization budget. We therefore have lost half of the $2 billion amount, while we get $470 million through the Canada health and social transfer.

No one is fooled. The Atlantic provinces and Quebec have been the big losers in this Liberal shell game. People know it.

Overall, transfers are decreasing in amount. To give one example, a figure that came out last week in the committee chaired by Jacques Léonard, who was president of Quebec's treasury board. He is very familiar with the public finances of Quebec but also has a very clear picture of federal public finances. It was found that, between 1994-95 and 2002-03, the revenues of this government—with the present PM as Minister of Finance—rose 45%. That is nothing to be sneezed at when there is so much talk of belt-tightening.

Obviously, they used part of this money to increase their bureaucracy. Operating expenditures increased by 39%. I would remind hon. members that, at the time, inflation was around 16% and the population of Canada increased by a little less than 4%. If memory serves, the figure was 3.9%. So the increase was not because of increased needs.

In fact, the needs did increase in the provinces, but not the needs for federal bureaucracy. It was merely a Liberal strategy, of Pierre Elliott Trudeau and all those who followed him, to keep on building up the power of the central state in order to create a unitary state, by strangling the provinces financially.

The proof of this is that, while revenues increased by 45%, while bureaucratic expenses increased by 39%, government transfer payments to Quebec decreased by 7.6%. That is the truth. That is the reality. The rest is just smoke and mirrors.

The machine was beefed up, they made themselves indispensable, and they strangled Quebec financially. They will pay for that at the next election, if only they get their act together and call one.

They are wondering, “Will one week be enough to try and convince Quebeckers and the rest of Canada that we are a good government?” Well, of course not! They have been there 10 years. Taking stock of those 10 years, we realize that in the absence of a strong opposition, they are simply all over the map.

Therefore, in terms of overall transfers to Quebec, we are looking at a net loss of 7.6%. And just to give you some idea, with regard to health, when our present Prime Minister became Minister of Finance, for every tax dollar taken from our pockets, in Quebec as in the rest of Canada, he would transfer 4.5¢ to the provinces. Today however, for every tax dollar he gets, he transfers a mere 2.7¢. Which means that he takes in more and more money, while giving out proportionately less and less to the provinces and to Quebec.

What this means is that, ever since the Liberals have come to power, ever since the former finance minister and now Prime Minister has held the reins in finance, Quebec has been cut by a total of $10 billion. This represents a drop of $1,300. Small wonder then that the provinces and Quebec have been hard pressed to make ends meet. The sheer fact of having been able to eliminate the deficit is a miracle in itself under such circumstances.

This cannot go on forever, though. It is already no longer the case in a number of provinces. Ontario is in a deficit position, B.C. as well. Most of the Atlantic provinces have deficits. As for Quebec, it is experiencing—to use the finance minister's expression—some difficulties with its budget. This year, with sales of some assets, it has managed to balance the budget, but assets cannot keep on being sold.

The responsibility for this lies with the federal government. In this case, neither Mr. Charest nor Mr. Séguin are responsible. They have been strangled financially by this government, as the previous Quebec government was, and as the provincial governments currently are. We have a strike in Newfoundland, and a strike in the B.C. health system. There is not a single politician who would be in favour of a strike in the health sector, knowing what public opinion is on this. Yet they have to make hard decisions.

Having been involved with unions, I can tell you that I have seen governments forced to make hard choices. Sometimes they have to stir up confrontations, as was the case in Newfoundland and British Columbia. They are, however, not the ones responsible for the situation; the federal government is. There is nothing whatsoever in this budget to suggest that any corrections will be forthcoming in the next few years. In my opinion, the people of Quebec are going to have a very clear understanding of just how much it will be in their interests to send as many Bloc Quebecois members to Ottawa as possible in the upcoming election.

So that is what there is in Bill C-30. What is not in the bill, and in the budget, is equally deplorable. As far as employment insurance is concerned, $45 billion has been diverted, while people on the North Shore and in other areas are starving. For months, forestry workers in the northern part of Lanaudière have not seen a cheque. The sawmills have suffered because of the softwood lumber crisis, which is not settled even though we won. The Americans have still not opened their borders to us, and we have not got back the $2 billion they collected illegally.

Employment insurance reform is necessary, and the money is there. Now, on the eve of the election, the Liberals say it is coming. Let them table the legislation, since they are taking their time to call the election. We will vote in favour of a substantial improvement in employment insurance. If the Liberals do not do this, people will remember that, in 2000, the President of the Privy Council went to the Saguenay and told the construction workers, “We are going to improve the employment insurance system”, and then nothing was done.

I could go on and on. I have examples concerning families, the guaranteed income supplement, the sponsorship scandal, and gun control. And as for the sales of Petro-Canada stock, we cannot foresee exactly what will happen with that. Commissions will be paid out. That is worth about $3 billion. What brokerage firm will be hired to sell this stock? Probably some friends of the government. And so it will be exactly the same thing that happened in the sponsorship scandal.

Not only are the federal Liberals—the Liberal Party of Canada—more interested in defending the interests of the Liberal Party than defending federalism, but worse yet, they defend the private interests of certain friends of the government. Regarding the sale of Petro-Canada stock, we want to know who is going to sell the stock and how the brokerage firms will be chosen.

I did not have time to address the issue of tax havens and CSL International. I do not know if members had an opportunity to watch the program, Enjeux . The headquarters in Barbados is just an empty shell, and that is close to the line of illegality, in my opinion. But we will dig into that at another time. With all of this, I simply want to say that the real democratic deficit is the fact that Quebec is being strangled. The only answer for that is the sovereignty of Quebec, and the coming election will be a step toward that sovereignty.

Government Programs

[The Deputy Speaker]

Order, please. I have the honour to inform the House that a communication has been received which is as follows:

Rideau Hall,

Ottawa

March 26, 2004

Mr. Speaker:

I have the honour to inform you that the Right Honourable Adrienne Clarkson, Governor General of Canada, signified royal assent by written declaration to the bills listed in the Schedule to this letter on the 26th day of March, 2004 at 11:01 a.m.

Yours sincerely,

Barbara Uteck,

Secretary to the Government General

The schedule indicates that royal assent was given to Bill C-6, an act respecting assisted human reproduction and related research; Bill C-13, an act to amend the Criminal Code (capital markets fraud and evidence-gathering); and Bill C-18, an act respecting equalization and authorizing the Minister of Finance to make certain payments related to health.

Supply

[James Rajotte, Canadian Alliance, Edmonton Southwest, AB]

Madam Speaker, I compliment my colleague on his comments today. Before I comment on one important point in his speech, I would like to congratulate him on his recent selection as our deputy leader. He is going to do a fantastic job in that role.

The Prime Minister said that it is a brand new government that started office on December 12. He also said that he is a policy person bursting with new ideas and that he could not wait to become Prime Minister to implement his ambitious agenda.

As our deputy leader pointed out, there have been 24 bills introduced thus far in the House of Commons. Three of those bills actually have some difference from those in the last session. Bill C-1 is a pro forma bill that implements the throne speech but does not actually contain any legislation. Bill C-24 was a correction to the Parliament of Canada Act regarding benefits to members. There was nothing whatsoever in that bill about policy.

Bill C-18 actually had something different from the bill in the previous session. Half of the bill was from the Chrétien government and extended equalization. The second part contained a one time payment to the provinces regarding the health care accord of 2003.

In 24 bills, what we have from the policy agenda Prime Minister is half a bill, half a piece of legislation. The government called the House back three weeks late and took six days to invoke closure to reintroduce Prime Minister Chrétien's agenda. The government is so bereft of vision, so bereft of a policy agenda that it is implementing Chrétien's agenda. Why did those members throw the last prime minister out if his agenda was what they wanted to implement?

I would like the member to comment on the fact that the government has absolutely no vision. This is shown in the fact that in all the legislation one-half of one bill is all the government can produce. That is all the policy agenda Prime Minister can produce.

Federal-Provincial Fiscal Arrangements Act

[The Speaker]

The House will now proceed to the taking of the deferred recorded division on the motion at the third reading stage of Bill C-18.

The hon. deputy leader of the government.

[Francine Lalonde, Bloc, Mercier, QC]

Mr. Speaker, it is with mixed feelings that I take part in this debate. In fact, I am outraged because the government is putting in the same bill a promise made by Prime Minister Jean Chrétien in February 2003, more than a year ago, to invest $2 billion in health care. That was supposed to be part of what the federal government was going to do for health care. So, in this bill, we have, lumped together, the $2 billion that was promised more than a year ago, and an extended equalization formula that the provinces do not want.

The government has taken a promise, something owed us and made it conditional on the extension of the equalization formula, which will do Quebec out of $723 million this year.

In other words, with respect to the $2 billion, of which Quebec's share is $472 million, members are forced to say “yes”, but if they say yes to the first measure, they have to say yes to the second. Yes, we want $472 million more for health care, but we also agree to get $723 million less in equalization.

This bill is a sham. My colleague from Joliette called it a stunt. We could have a contest to find which synonym best describes the kind of deceit practised by this government.

At first, the Bloc Quebecois wanted to have this bill split so that we could say yes to the proposed health transfer. It is not enough, but it was promised a year ago, so let us have this money before the election. But we are not even sure that it will happen before the election; it could also happen after the election. They will talk about it some more. They have been talking about it for a year, and they will talk about it some more.

Should we say yes to that? The problem is that, if we do, we will have to say yes to the second part of the bill, with which we totally disagree. That is why my colleague asked that the bill be split. And, amazingly enough, our Liberal colleagues, who form the majority and do whatever they want, decided to vote against splitting the bill. They voted in favour of this sham, to try to pull a fast one on us.

We think that Quebeckers will understand the fact that we are opposed to this bill. We will not try to filibuster this legislation, or to take any other action. We are not stupid. We want the money allocated for health to be paid to Quebec and the other provinces as quickly as possible: an amount of $472 million is better than nothing.

However, we want to stress the fact that, by allocating this money, the government is not giving what was anticipated for 2003-04 alone, which is $723 million. For that reason, we will oppose this legislation.

Moreover, we are rather upset at this supposedly new, supposedly transparent and supposedly democratic government. This is some democracy.

The equalization formula must absolutely be changed. Under the act that was passed, the current equalization formula was to end in March 2004. That formula was adopted for a period of five years, from 1999 to 2004. Normally—and this was done, since negotiations were undertaken—the provinces want major changes, so that things are more predictable, because right now the amounts are not predictable, and so that the process is more fair and also more transparent, because there are 3,000 different elements that come into play, thus making it difficult to anticipate the results and to verify them. So, a major reform is in order.

Some work was done. However, instead of using its energy to quickly negotiate and reach an agreement with the provinces before the deadline, this so-called new government came up with a bill that extends the program for an additional year. The former government did that, but the new government maintained it and made it worse. The Liberals want us to agree to extend the old equalization formula for one year.

I will just mention two figures. If we extend it for a year, we can be sure that there will be a difference of $1.4 billion between the forecasts made by Quebec and those made by the federal government. The numbers are there. An amount of $1.4 billion is indicated in the estimates for Quebec. The equalization formula must be changed and it could be changed quickly.

Unfortunately, this new old government has not followed up on the provinces' desire for change, at a time when there is a surplus. We must not forget that when the new Minister of Finance was sworn in, he immediately copied his predecessor, now Prime Minister, in saying, “There will not be a surplus this year; things are tight. If we want to allocate $2 billion to health, there must be changes and cuts”. However, the federal government, in large part, has spent twice as much as Quebec and Ontario. We will not get into that.

How much is the current surplus? It is $7 billion, and we know that another $7 billion of surplus money from previous years has already been put into various foundations. The government would have us believe that it is not able to negotiate a new equalization agreement at this time. This makes no sense.

For these reasons, we will vote against this bill. We cannot help saying that what they are doing is unacceptable. No one knows what will happen to the $7 billion surplus. Will it once again be used to pay down the debt without anyone deciding? What will be done with this $7 billion is not decided democratically. Half of that money comes from the surplus in the employment insurance fund, once again, paid by businesses and workers. Will it go into foundations and then come back in the form of presents come election time? No one knows.

The Bloc Quebecois will vote against Bill C-18.

In conclusion, I will read a paragraph that struck a chord with me from an article by Michel David in yesterday's Le Devoir . It reads:

Someone should perhaps have suggested that federal finance minister Ralph Goodale might wait a few days before announcing the downward revision to the equalization figures. If he wanted to put the provinces' backs up right before the Vancouver meeting, he could not have found a better way. What we heard from the first ministers was a carbon copy of how each of these meetings ended during the Chrétien era.

So here we have this independent writer's corroboration of our own conclusion: this new government is just a rehash of the old one, with faults that are becoming more and more visible with each passing day.

We are opposed to this bill. We want the money for health, but we want to make it clear that the refusal to negotiate equalization, when the government has the money, is an outrage. It has a serious impact on the future, not only for the people of Quebec, but also for those in the Atlantic provinces.

[Wendy Lill, NDP, Dartmouth, NS]

Mr. Speaker, I am pleased to be sharing my time with the member for Acadie—Bathurst. Together we are going to be talking about the impact that the equalization program has on Atlantic Canada.

I wanted to start by saying it is a pleasure to speak to this bill but I find that any optimism I once had that the Liberal government was willing to be fair in its dealings on equalization has been sorely shaken by the latest figures on equalization released by Treasury Board. Unfortunately, since November 2003, when I last spoke in the House on equalization and the effects on the Atlantic provinces, the situation has become much worse. I will outline what I mean by that.

Between 2000-01 and 2004-05 total major transfers to the provinces, and that includes the Canada health and social transfer, equalization and tax points, increased by almost 18%. That is up from 15% in October 2003. That is the good news and that sounds not bad. However, in Atlantic Canada, total major transfers dropped by almost 4% during the same period, so the news only gets worse for the poorest provinces.

When I spoke to this issue in November 2003, the Treasury Board estimates indicated that of the $6.4 billion increase in major federal transfers, the Atlantic provinces received minus $200 million. The latest estimates show that out of a $7.6 billion increase in total major federal transfers, the Atlantic provinces received minus $240 million. What a difference four months makes. The have less provinces continue to get even less.

Since Bill C-18 seeks to maintain the status quo on equalization from one year to another, I have to wonder how the government believes it is helping the have less provinces. Apologists for the government will say that the Atlantic provinces should not complain, that we have offshore oil and gas and that our ship has come in. There may be those who say that we should be proud because we are less dependent on federal transfers.

First of all, there is no oil and gas off the shores of New Brunswick and P.E.I. Why have they seen increases in federal transfers that are just one-quarter and one-sixth, respectively, of the national increase? I will tell members why. It has nothing to do with oil and gas. It is that the system of federal transfers is defective. The system is based on population and our region is losing population.

Federal policies are driving people out of our region so our provincial governments are losing hundreds of millions, even billions, in federal transfer money. That is a great system, is it not? Federal economic policies, or lack thereof, drive people out of those have less regions and the government responsible pockets a windfall.

Take equalization payments to Nova Scotia as an example. Last February the Department of Finance estimated that between 2001-02 and 2003-04 Nova Scotia would get $3.72 billion in equalization payments. This February we found that Nova Scotia would only get $3.55 billion. This is a shortfall for Nova Scotia of $170 million, but a windfall of $179 million for the Liberals, almost enough to pay for another Groupaction fiasco.

With an unexpected shortfall of $170 million, there is not enough revenue left to meet the needs of the remaining population in Nova Scotia, let alone to bring forward the economic and social policies we need so that our people will not have to go down the road. It might not be so bad if the Liberals put the money they are clawing back from the Atlantic provinces into the policies we need in order to turn around our outmigration, but they are not doing that. If they are not wasting it on some boondoggle, they are recycling it and claiming it is new.

Over the last two years the government has saved over $3 billion in equalization payments to the provinces. That is roughly half of the “new money” that has gone into health care over that period.

More money for health care, even though it is nowhere near enough, is a good thing, but when half of it is clawed back in equalization, it is like robbing a bunch of Peters, Johns and Garys to pay Paul. When we consider that most of the new health money will go to the provinces with the larger populations, the have provinces, then we have something worse. It is Robin Hood in reverse, taking from the have less to give to the have mores.

The Minister of Natural Resources talked this week about changes to the offshore energy agreement with Nova Scotia and Newfoundland. Please let me emphasize that P.E.I. and New Brunswick do not benefit from offshore energy agreements at all. I am pleased to hear that the Liberals are finally ready to consider that the offshore agreements were not fair to begin with. I recognize that it was the Mulroney Tories who came up with the original deal.

The news about this offshore industry has not been good and many doubt that we will ever have a production boom such as Alberta had. The fact is that getting oil or gas from below the ocean floor is more expensive, more dangerous for workers and the environment, and more uncertain in its values than any land based operation.

People in Nova Scotia and Newfoundland should not be penalized through an equalization program that expects a payoff in the future. Until the offshore industry is guaranteed and long term, instead of a series of underproducing operations, potential offshore royalties should not affect the equalization formula at all.

I want to echo something my colleague, the member for Halifax, said in a previous debate on equalization. The provinces have asked for a 10 province plan, one that considers all the provinces, not the middle five that the federal government uses now.

That would make the payments more equitable and would better reflect the economic situation of the majority of provinces. It would also prevent a huge loss in equalization when one province has a bad year, as was the case last year with Ontario.

The status quo simply is not adequate when it comes to the equalization plan. I fear that giving the federal government another year's grace to renegotiate equalization will result in an even less equitable program as provinces get more desperate for funds. In the end it is not the provinces that suffer, it is Canadians.

I will now turn to the second part of the bill, the payment of an extra $2 billion to the provinces for health care. The intent of the equalization program is to allow every province to offer reasonably comparable services to other provinces and to their citizens.

I was horrified to hear Lorne Calvert, the premier of Saskatchewan, quoted in the papers this week as saying that without immediate aid from the federal government, we can expect to see the Canadian health care system as we know it disappear within 10 years. What is going on for one of our premiers to be saying that?

When I look around, I see how the wealth of Canada has increased many times since medicare was first proposed and implemented. We have more money now than at any other time in our history, but the government chooses not to spend that money where Canadians want to see it spent. Canadians want a health care system that they can depend on. We want the money to be there and we know the money is there with the federal surplus, $7 billion to $8 billion this year.

Why are the Liberals letting the health care system fail when there is money available to sustain and improve it? It is like a homeowner who decides never to repair the leaks or pay for upkeep so that the mortgage can be paid down sooner, but when the mortgage is finally paid off, there is only a pile of wood and tar that can never be put back together.

A payment of $2 billion is a small start in helping the provinces improve health care. However, the way the Liberal government agreed to provide the money was stingy in the first place. It put debt management ahead of sustaining our health care system. Then it did not offer more money when it became clear that there would be a much larger surplus than was expected. This does not give much hope that the Liberal government takes Canadians' concerns seriously.

In conclusion, the NDP will support this bill to ensure the provinces continue to receive their money, but the system itself is flawed. There needs to be a more equitable equalization formula. The NDP will continue to push the government to work with the provinces for a formula that benefits Canadians in all provinces.

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, we just had a nice illustration of the fact that this government is not prepared to face the reality. There is a fiscal imbalance. Everyone in Quebec agrees on that. Federal Liberals are the only ones who do not agree. Because of this fiscal imbalance, the provinces, which have responsibilities in areas where costs pose very significant problems, including in health and education, no longer have the means to deliver the services that the public is entitled to.

On the other side, there is the federal government, which generates surplus after surplus and which is wasting our money. It is not just the sponsorship scandal. There is the 40% increase in operating costs, which is double the increase in Ontario and Quebec over the past five years. There is also the $10 billion in additional spending, including $1 billion for defence, when we do not even know what the Canadian army is used for. This is evidence of the fiscal balance.

So, we must find ways to correct this fiscal imbalance. Of course, one of the simplest solutions would be for Quebec to withdraw from the Canadian federation, to take its marbles and to go it alone. Let us not forget that Quebeckers send 60% of their income taxes to Ottawa. As far as we are concerned, this is the preferred option in the longer term.

In the meantime, we will try through every possible means, including the Canada social transfer and the transfer of tax points to Quebec, to correct this fiscal imbalance. We cannot give our support to the federal government for dragging its feet regarding the equalization issue.

At the end of October or in early November, the government already had a bill to extend the equalization program for one year. Back then, there was plenty of time to negotiate with the provinces and quickly reach an agreement. Are we going to support the fact that Quebec will lose $1.4 million, an amount which is not at all compensated with the $2 billion? We are talking about $472 million. We cannot do that.

If the government could give us some guarantees, maybe we could look at things differently, for example, on retroactivity, which is a minimum. Presently, since there is no retroactivity guarantee in Bill C-18, the federal government is under no pressure to solve the issue. Consequently, it will drag the issue until 31 March 2005. In 2005, maybe they will come back with a bill to extend the equalization formula for one more year.

If we were guaranteed that the agreement would be retroactive, that would put pressure on the federal government which, if it played for time, would not be able to unduly penalize the provinces. However, it penalizes them anyway because, when the finance minister will prepare the budget, the provinces will not know how much their equalization payments will be the following year. But they will realize that they will be getting less money than what they got for the current year and less than the year before. Consequently, they will find it very hard to deliver the same services in health care and education.

I have already explained this to you, Mr. Speaker, and I am sure you remember. When we look at Quebec's budget as a whole, if we take out health care and education, there is a mere $9 billion left.

Consequently, it is impossible for a government like Quebec's to balance its books without touching to health care and education, if there is no increase in the federal government's transfer payments through equalization, the CHST or otherwise.

It is in this context that equalization payments must be increased. We must get guarantees that the money will be given to the provinces, particularly Quebec and the Atlantic provinces, which will be facing serious difficulties.

It is clear that the reality of fiscal unbalance has not been recognized. The government is trying to buy time before the election. It wants to get a blank cheque to do whatever it wants after the election. We will denounce that throughout the election campaign.

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, a mere nine minutes is not much to criticize this bill, although I have to admit I had a chance to begin my remarks before question period.

I was telling members that Bill C-18 is a vote-getting ploy. Their first stunt was to combine two separate items in this bill. The only common denominator is money. The first item deals with extending the current equalization program. We oppose that because it penalizes Quebec and Atlantic Canada in particular. The second item is the $2 billion for health that has been promised repeatedly.

Obviously, we agree with the second item. There is a great deal of confusion because both items are included in the same bill. But like I said, nobody will be fooled.

The second stunt is that combining two items, they give the public the impression that, even if they lose a little in equalization, they will have a net gain, with the $2 billion. That is wrong. I explained how, with reference to both the federal government's estimates as well as Quebec's expectations. This applies to all provinces that receive equalization payments. However the figures are compared, Quebec must pay back the sum of $1.4 billion. Thus, it loses, in terms of being able to pay for its needs, particularly in health care.

In fact, the federal government is seeking to recover that $2 billion by lowering equalization payments. The problem is that each transfer formula has different objectives. The CHST is based on population percentage. Thus, out of this $2 billion, Quebec will receive about 25% or $472 million. But if this $2 billion had been paid out in equalization, more than 50% of the money would have come to Quebec. Therefore, we lose in this process and we cannot agree to it.

Once again, it does not matter much which angle we look at these things from, the sum of $1.4 billion that we lose in equalization is not offset by the $472 million we receive out of the $2 billion. Thus, for Quebec, Bill C-18 represents a net loss of about $1 billion. In fact, the amount of $2 billion for health covers only one third of Quebec's losses suffered because of the extension of this equalization formula.

Those were the first two stunts I referred to. There are a few more. The third has to do with Ottawa's claim that there is no money. The finance ministers—past and present—have always used the same non-transparent tactics to cover up the real state of Canadian public finances in the federal government. They told us for months that they were going to have to dig deep to come up with $2 billion and that they were not sure they would be able to.

This is untrue. We realize it now, when everyone agrees that the federal surpluses for this year will not be $2.3 billion, as the Minister of Finance said, but $7 billion to $8 billion.

We can see also that federal operating expenditures have increased by 40% in recent years. These are not transfers to individuals or provinces; it is the federal bureaucracy that has gotten bigger. If the government seriously wanted to reduce operating expenditures, it could easily find $3 billion or $4 billion.

There is the money for foundations, and the Auditor General mentioned this in 2002. There is $7 billion to $8 billion sitting in foundations, whether it is the millennium scholarships, the Canadian Foundation for Innovation or the other foundations. All this money would provide enough leeway to quickly solve the fiscal imbalance problem, in particular through reviewing the equalization formula.

I would add another element that proves to us that the federal government has the means to solve the problem in the short term, and that is that, this year, it announced a $10 billion increase in spending. This is a substantial amount. This is another 6% increase.

So the money is there, the means are there, but there is no political will. The fact that there is no political will has meant that the Liberal government, whether under Mr. Chrétien or the new Prime Minister, does not want to quickly solve this issue.

They have been dragging their feet. This is the first time we have seen a bill like C-18, which proposes to extend by one year the equalization Bill with all the problems this entails for public finances in the provinces, Quebec in particular, as I explained earlier.

The federal government has been dragging its feet and wants to continue doing so because there is nothing in this bill that would allow us to pressure the federal government to move forward in negotiations. We therefore cannot support it.

As I just said, this is the first time we have been required to have a bill to extend the equalization formula by one year. In the past there has always been agreement with the provinces by the March 31 deadline.

This time, the government has been dragging its feet, and is still dragging its feet, and will continue to drag its feet because by extending the formula by a year, there is no pressure on the federal government to resolve this in the short term, especially—and this is the fourth stunt—since there is no guarantee of retroactivity.

Why would the federal government be in any hurry to negotiate if, in any case, it can wait a year until the March 31, 2005 deadline to find a solution with the provinces?

The Minister of Finance has twice said, “Yes, I promise there will be retroactivity”. I want to believe him, but then why, at the Standing Committee on Finance when I introduced an amendment asking for retroactivity to April 1, 2004, did the Liberals turn it down? There is no real guarantee. We have no guarantee that the agreement will be retroactive to April 1 of this year.

They may say, “Yes, but the Minister of Finance gave his word”. What good is the word of the finance minister when it is so difficult to get answers from the government about the sponsorship scandal?

There is a fifth stunt. All this is a strategy to put off serious discussions with the provinces about the equalization formula until after the election. What this government and this Prime Minister want is a blank cheque to decide unilaterally what amount they will transfer to the provinces.

We will not be part of it. We will not support this election-oriented strategy that will deprive Quebec of $1.4 billion this year, because there is no guarantee of retroactivity if an agreement is reached during the year.

However, what the provinces are asking for is not all that complicated, and I will leave it at that. The provinces are asking that the formula be changed to take into account the fiscal capacity of all ten provinces and not only five. They are asking that the payments be more predictable. There have been wide variations between the October and the February equalization estimates. They also ask for more transparency. When some 3,000 variables must be taken into account to calculate the size of the equalization payment, that causes problems.

For Quebec in particular, we ask that property value be based on the real value of lands and properties and not on the revenues received by owners. This deprived Quebec of $400 million last year.

We do not need the government to push through Bill C-18 but rather to give clear indications with respect to the equalization program. As I said before, we agree on the $2 billion. However, the government has to give clear indications on what it intends to do in the upcoming budget. What are the expectations?

The finance minister has said already that there was no question of all 10 provinces being taken into account. The government should make it clear, before the election, so that Quebec voters in particular will know what they are voting on.

We would also need to know if the budget will acknowledge the fiscal imbalance between the federal government and the provinces, the fact that the federal government has far too much money compared to its responsibilities, that the provinces are short of money, and if there is a political will to solve this fiscal imbalance.

There was no sign of openness on the government's part in the debate on Bill C-18. This is not acceptable. We are no fools and we will not support Bill C-18.

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, I am extremely pleased to take part in this debate on this stunt known as Bill C-18, an act respecting equalization and authorizing the Minister of Finance to make certain payments related to health. This is typical of the federal government, the Liberals and the Prime Minister. The sole purpose of this bill is to get votes, nothing more.

First, contrary to the bill introduced in the previous session, this bill combines two things that have nothing to do with one another.

On the one hand, there is the one-year extension of the current equalization program and, on the other hand, there is the $2 billion transfer first promised by Jean Chrétien, then by the hon. member for Ottawa South and, finally, promised and delivered by the current Prime Minister.

Obviously, the Bloc Quebecois is not only in favour of this $2 billion transfer, it has been demanding it for a very long time. In fact, we demanded it back when the federal government and the finance minister, both old and new, were telling us that the federal coffers were empty and that the government was scraping the bottom of the barrel to find this money for Quebec and the provinces.

We are therefore in complete agreement. Not only are we in agreement, but I wanted to make an amendment in the Standing Committee on Finance to ensure that this $2 billion was a recurring item, to rectify the fiscal imbalance and help the provinces and Quebec fulfill their health care commitments.

Consequently, we have no real problem with this aspect of the bill. However, with regard to the one-year extension—I want this to be clear, because the bill clearly indicates an extension until March 31, 2005—the current equalization program is not acceptable to those defending Quebec's interests. The loss to the provinces is several billion dollars; the loss to Quebec is about $1.4 billion.

It is out of the question to ask those with Quebeckers' interests at heart, such as the Bloc Quebecois, to approve of such extensive cuts. This would totally contradict the mandate that Quebeckers have given us.

Obviously, the Liberals knew the Bloc Quebecois were opposed to the extension of this equalization formula. As I said, we had made that clear from the time the previous bill on the same subject was introduced. So they thought that, by putting the transfer of $2 billion into the same bill, they would probably manage to trick us, trick the people of Quebec and make us feel obliged to support such a bill.

We are, however, capable of walking and chewing gum at the same time. We are capable—as Quebeckers are clear on that—of explaining that, while being in agreement with the transfer of $2 billion for health, we can be opposed to extending the equalization formula for the coming year, because we will be penalized in the long run, both in Quebec and in the Atlantic provinces.

We asked the committee to split the bill, so that we might vote separately on extension of the equalization formula on the one hand and on the $2 billion transfer for health on the other. The committee refused. The Liberals refused.

As I said, the result of this is that they are making us speak out against the whole bill although—I repeat—we agree with the $2 billion transfer. I even tried to propose that this be a recurring amount, but for procedural reasons, unfortunately, that was not possible.

So, the first stunt was to combine two things that have nothing to do with each other, except that they both have to do with money. The Bloc's position on the two are diametrically opposite.

The people of Quebec are intelligent people and were not taken in by such a stunt. We will not play the government's, the Liberals, and the Prime Minister's game.

Then, there is the second stunt. By combining the two, the Liberals, the Prime Minister, the Minister of Finance, are suggesting to the provinces, Quebec and the Atlantic provinces in particular, that in the end the equalization formula is really not very advantageous. “But, with the $2 billion we are going to transfer to you, you will stand to gain”, they say.

This is false. No matter how one looks at it, Quebec and the Atlantic provinces in particular, stand to lose with Bill C-18.

Let me give an example. There are several ways to evaluate this loss. Let us look at what is happening with the equalization estimates made by the federal government, by the Department of Finance.

In reality, what the federal government, the Liberals and the Prime Minister are doing is this: on the one hand, they are giving $2 billion for health but, on the other hand, they are taking back that money through the equalization program. As I said, we are not fooled by this scheme.

Here are the October 2003 equalization estimates for Quebec. For 2002-03, it was estimated that Quebec would receive $4.662 billion. In February 2004, according to the most recent estimates released on Monday, the amount is down to $3.985 billion for 2002-03. This is a loss of $677 million to Quebec, based on estimates made by the federal government itself.

For the year 2003-04, the estimate made in October 2003 was for a payment of $4.525 billion to Quebec. In fact, it was on that basis that the Quebec finance minister Séguin prepared his budget. Now, based on the February 2004 estimate, under the equalization formula that the federal government wants to extend for a year, we are finding out that the amount of $4.525 billion is down to $3.802 billion. This is a loss of $723 million to Quebec. And the government would want us to approve that?

For next year we have an initial estimate, therefore we cannot compare it to a previous estimate, but there is talk of equalization for Quebec of $3.691 billion. That means that in addition to the cut in equalization for 2003-04, in 2004-05 an estimated $111 million more will be cut. In total, based on its own estimates, the federal government is telling us that this year it is giving Quebec $1.4 billion less. That is the current estimate.

Of course the Minister of Finance says he is going to spread this out over time. Nonetheless, this is a loss. In the coming years, the Government of Quebec will have to make do with a lot less money in transfers from the federal government.

I remind this House that the February 2003 agreement is expiring soon. This year Quebec will receive only $365 million under that agreement. It is clear that the money situation in Quebec—and in the Atlantic provinces—is going to be especially difficult, if not disastrous this year and in the years to follow.

This is all because of the federal government's own estimate. Now, as for Quebec's expectations, what was in Mr. Séguin's budget? For 2001-02, we expected to receive $5.336 billion from the federal government. Just imagine. I am talking about the 2001-02 budget. That money was spent. Ottawa turned around and said it would not be $5.336 billion, but $4.690 billion. That is a net loss of $646 million in terms of what Quebec was expecting and what Quebec spent based on estimates.

For 2002-03, we expected to receive $5.315 billion from the federal government in equalization. On Monday, we were told it would be $3.985 billion. That is a loss for Quebec of $1.330 billion. That money has already been spent.

For the coming year, we are being told we will be given a little more. Quebec had anticipated a cut in equalization. In his September study, Mr. Séguin had reduced his equalization expectations to $3.290 billion, given the problem with this formula. We were told that there would be a little more money, $3.802 billion. Note that this is less than we expect to spend this year.

In total, with respect to Quebec's expectations, with respect to the money that has often been spent on health, in accordance with Quebeckers' priorities, it amounts to $1.464 billion less.

With the exception of Alberta, this is taking place in an extremely fragile financial situation. That is true for Quebec and for all the provinces. There is a risk that some provinces, particularly the Atlantic provinces, will find themselves with a deficit. And they want us to approve that? Whether we look at it from one angle or another, Quebec will be losing about $1.5 billion with this equalization formula. That is the money that was lost in the past; imagine what it will be in the future.

All provinces that receive equalization payments will be affected. If we look at all the provinces, in October 2003, the forecast equalization payment for 2002-03 was $9.709 billion. On Monday, we were told that it would be $8.73 billion, or a decrease of $976 million; the provinces will receive nearly $1 billion less.

For 2003-04, the current fiscal year, the payment forecast last October was $10.097 billion. Now we hear that it will be only $8.779 billion, or a loss to all provinces of $1.318 billion. In total, with the forecasts and the estimates that were published on Monday, this amounts to $2.2 billion less that the provinces will receive in transfer payments because of this equalization formula.

And they want us to agree to extend this for a year, because an election is coming up? No, Mr. Speaker. It is particularly hard on Quebec and the Atlantic provinces. I shall explain it to you, and since you are an extremely intelligent person, Mr. Speaker, you will understand right away.

There are two major transfer payments in the Canadian system. There is the Canadian health and social transfer, which is calculated on the basis of a percentage of the population, and there is equalization, which is based on the goal of reducing the gaps between the provinces' fiscal capacities. In this context, consideration is given not only to population figures, but also to the socio-economic status of the provinces.

Thus, they take $2.2 billion out of the equalization system that helps the poorest provinces, and, they put $2 billion back in, through the Canadian health and social transfer. But the CHST funds are divided proportionally among the provinces, based on population, not taking into account the socio-economic situation in the various provinces.

I see you are signalling me to stop, Mr. Speaker.

[John McKay, Liberal, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, thank you for the opportunity to enter into this debate.

I would like to start by thanking my colleagues on the finance committee for their cooperation on the bill. As hon. members know, the bill is of great significance to the provinces and to those of us in the House who want to see that the legislative timelines are met. I want to particularly acknowledge the help of the committee chair, the member for Etobicoke North, and all members on the committee from both sides of the House who dealt with this in an expeditious fashion.

The measures in the bill pertain to two of the four federal transfer programs, equalization and the Canada health and social transfer, the CHST as it is commonly known.

Through these programs, the territorial formula financing and the new health reform transfer, the federal government, in partnership with the provinces and territories, plays a key role in supporting the Canadian health system and other social programs.

As the largest federal transfer, the CHST provides the provinces and territories with cash payments and tax transfers in support of health care, post-secondary education, social assistance and social services, including early childhood development and early learning and child care.

Equalization, as hon. members know, is the federal government's most important program for reducing fiscal disparities among provinces. It ensures that the less prosperous provinces have the capacity to provide reasonably comparable levels of public services at reasonably comparable levels of taxation.

This is not about the level of equalization. This is about the payment of equalization and extending legislative authority to carry on with payments of equalization.

Bill C-18 supports these two important programs and makes it possible to reach two goals.

First, it provides the Minister of Finance with the authority to continue to make equalization payments according to the current formula for up to a year in the event that the renewal legislation is not in place by April 1, 2004.

Second, it provides the federal government with the authority to pay an additional $2 billion from the consolidated revenue fund to the provinces and territories for health.

Bill C-18 lays out the steps the government is taking to ensure that the provinces and territories receive the payments to which they are entitled, payments supporting the public services provided to Canadians.

The bill before us today enables the continuation of equalization payments while renewal legislation is finalized.

The current version of the legislation authorizing the federal government to make equalization payments to the provinces will expire on March 31, 2004.

While discussions on the five year renewal are underway with the provinces, Bill C-18 represents a preventive measure to authorize the federal government to continue making payments for up to a year, if necessary.

This will assure equalization receiving provinces that they will continue to receive payments if renewal legislation is not in place by the end of March. This is the critical point of the bill. If this legislation does not pass, then those payments cannot be made.

Without Bill C-18, the Government of Canada does not have the authority to make equalization payments, which would result in serious negative impacts for receiving provinces as payments would cease.

Let me briefly review how the program works.

To begin, payments are unconditional, meaning that provinces can spend their funds as they see fit on public services for their residents. Next, payments are calculated according to a formula which responds to the changing economic fortunes and circumstances of all of the provinces.

The formula measures the performances of provincial economies to the average fiscal capacities of the five middle income provinces, which forms a threshold or standard. As the relative fiscal performance of provinces go up and down, equalization entitlements go up and down. These increases or decreases in entitlements are the result of the formula working as it should, not the result of decisions by the Government of Canada to increase or decrease entitlements.

Provinces with revenue raising ability--or fiscal capacity as it is known in the jargon--below the threshold or standard amount receive equalization payments to bring their revenues up to the standard. At present, eight provinces are below the standard and qualify for federal support under the program. Only Ontario and Alberta are not recipients.

The third element of the program involves a floor, which provides provincial governments with protections against unexpected, large and sudden decreases in equalization payments that would otherwise be warranted by the straightforward application of the formula. The floor limits the amount by which the provinces' entitlements can decline from one year to the next.

Two built-in mechanisms ensure that the program remains current. The first is an ongoing review of the program by federal and provincial officials, which makes sure that the differences in fiscal capacity are measured as accurately as possible.

The second mechanism, and the one central to today's debate, is that renewal legislation must be introduced every five years following federal-provincial consultations. The last renewal was in 1999. The current legislation is set to expire on March 31 of this year, as I indicated earlier. The renewal legislation will guarantee that the program remains up to date and that the best possible calculations and data are used to determine equalization payments.

The renewal legislation will also guarantee that the integrity and fundamental objectives of the program are preserved. The government must be able to assure provinces that they will continue to receive equalization payments even if the renewal legislation is not passed by the end of the fiscal year.

Bill C-18 addresses this problem by enabling the continuation of payments for up to a year while the renewal legislation is being finalized. Passage of the bill would ensure that the public services which provinces fund through the equalization program will continue to be protected for the benefit of their citizens. When passed, the renewal legislation will both supersede the extension and be retroactive to April 1, 2004.

In considering Bill C-18, I urge hon. colleagues to keep in mind that the impact on equalization receiving provinces and their residents could be very significant if the bill is not passed. It is therefore imperative that this legislation be passed quickly.

Now, if I may, I will turn to the health part of the bill. As my hon. colleagues know, federal support for the Canadian health system is provided primarily through the CHST and the new health reform transfer.

Bill C-18 would amend the existing CHST to authorize payment of $2 billion as a supplement to the CHST. This fulfills the commitment made by the Prime Minister following the January 2004 first ministers meeting. It is also in keeping with commitments made in the 2003 first ministers accord on health renewal, the 2003 budget and the 2003 economic update.

I would like to point out that this funding is in addition to the increased federal investment of $34.8 billion over five years for health that was confirmed in the 2003 budget. As a result, this funding will bring the federal government's total commitment in support of the 2003 health accord to $37 billion over five years.

I would like to point out that this funding can be provided without the government going into deficit. I want to point out, as I accompanied the minister across the country, that one of the things we heard repeatedly is that the government should not go into deficit under any circumstances.

Passage of the bill will provide the provinces and territories with the flexibility to begin drawing down these funds as they require, which would help them better plan for the future and provide health care services to their residents.

I encourage my hon. colleagues to pass Bill C-18 without delay. The measures in the bill affect the provinces and territories and thus their residents who depend upon them for public services. Not only is additional funding for health part of the federal government's ongoing commitment to health care, it is being provided within a framework of balanced budgets which will ensure its sustainability over the long run.

As hon. members know, the Prime Minister intends to meet with his counterparts in the summer to discuss long term sustainability of our publicly funded health care system. In the meantime, the bill would ensure that our health care system continues to be a proud example of our national values at work, as recently described by the Prime Minister.

Further, the equalization provisions in the bill underscore the priority that the government places on this federal transfer and ensure uninterrupted funding to the provinces until the renewed legislation can be finalized.

Through our federal system of transfer payments, all Canadians are guaranteed equal access to health care, a safety net to support those most in need, freedom to move throughout the country to seek work, higher education and training available to all who qualify, and reasonably comparable services in whichever province they choose to live.

The measures in Bill C-18 are designed to ensure that those goals continue to be met.

[Judy Sgro, Liberal, for the Minister of Finance]

moved that Bill C-18, an act respecting equalization and authorizing the Minister of Finance to make certain payments related to health, be read the third time and passed.

Business of the House

[Jacques Saada, Liberal, Leader of the Government in the House of Commons and Minister responsible for Democratic Reform]

Mr. Speaker, I will begin at the end, to be completely logical.

These are Senate matters. They do not concern the House in any concrete way. I would need to know what the Senate was going to decide before I could answer the question.

Also, regarding new bills, I am assuming that a bill that is good for the people is a bill that is good for the people, whether or not it existed previously. That is what we are working on. I hope to have the cooperation of our colleagues across the way to continue this process.

As to the plans for the coming week, as you know, this afternoon, we will continue debate on the opposition motion. Tomorrow, we will begin debate at third reading of Bill C-18, an act respecting equalization and authorizing the Minister of Finance to make certain payments related to health, including transfer payments of $2 billion to the provinces. Then, we will consider Bill C-10, an act to amend the Contraventions Act and the Controlled Drugs and Substances Act, followed by Bill C-15, an act to implement treaties and administrative arrangements on the international transfer of persons found guilty of criminal offences, and finally Bill C-12, an act to amend the Criminal Code (protection of children and other vulnerable persons) and the Canada Evidence Act.

On Tuesday, March 9, at 10 a.m., the Secretary General of the United Nations will address both houses of Parliament in the House of Commons. As you know, all parties have agreed that the Wednesday schedule will apply that Tuesday, in order to leave the morning free in honour of the Secretary General.

Finally, Thursday, March 11 will also be an allotted day.

Committees of the House

[Roy Cullen, Liberal, Etobicoke North, ON]

Mr. Speaker, as the new chair of the House of Commons Standing Committee on Finance, I have the honour to present, in both official languages, the first report by the Standing Committee on Finance on Bill C-18, an act respecting equalization and authorizing the Minister of Finance to make certain payments related to health.

It was agreed on Thursday, February 19, 2004, to report it without amendment.

Federal-Provincial Fiscal Arrangements Act

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC]

Mr. Speaker, I rise today to speak on Bill C-18, whose purpose is double.

It is somewhat surprising that, in the same bill, we find one part that finally transfers the $2 billion promised by Jean Chrétien and promised again by the current Prime Minister. This amount really should be transferred one way or another. It is a good idea in itself, but the amount is clearly inadequate. It is rather paradoxical and, I believe, unacceptable that this same bill is being used to extend the equalization agreement.

The equalization period is usually five years, and the current period ends on March 31, 2003. They want to extend it from 2004 to 2009, but without having real agreements with the provinces. It is rather like having an old collective agreement with a few holes and things that need fixing. We would like it to be improved. They assure us that the old agreement will apply for the entire period, unless something new is negotiated.

We would have preferred that the current government had done its homework on time and that we had a new equalization act that included the results of negotiations and agreements with the provinces. But the past predicts the future. We know that the Liberal government has not always kept its word on this.

Today, this is very frustrating. We can see that the surplus for the current year, ending March 31, 2004, will probably be in excess of $7 billion. The former finance minister, who is now the Prime Minister, deliberately underestimated the surplus year after year, and the new Minister of Finance is doing the same thing. On March 31, 2004, at a time when a number of provinces will be in situations where they cannot avoid a deficit, where they will be looking for money to spend on health care, the federal government will have $7 billion.

This is a government that acts as if it were a corporation. It is trying to have the largest profits possible, but it is the only stockholder. I think that the results are not what our society wants. It is true that the government must be well managed, but the bottom line is that, if the surpluses piling up do not make it possible to provide adequate services, there is no sense to it.

Yesterday, Quebec's finance minister was unable to refrain from saying so in the consultations he is holding on his own budget. It is frustrating to hear from farmers and people in social housing or other sectors in committee and see that the Quebec government does not have the money it needs to meet their needs.

Quebec and the provinces shoulder the responsibilities, and they do not have the means to obtain the money. The federal government is not responsible for front-line services in health, education, social housing nor a number of other things such as the current mad cow crisis. The federal government has not listened carefully, or it would have provided adequate funding.

In terms of this bill, we agree with the clause to invest $2 billion, as long as it is understood that this is insufficient. Additional funds are needed, and the federal government has the money. However, equalization, as it exists currently, is not sufficient for Quebec's needs and should be reviewed.

An amendment would have been a good idea. It would be appropriate. The $2 billion for health referred to in the bill should be made a recurring item. In the Bloc's opinion, such an amendment would improve the bill, make it more acceptable and ensure our support for it.

If this were a recurring item, funding would be more secure and dependable. As a result, the provinces would have a guarantee that they will not have to rely on the government's good will from one year to the next. It would be recognition that this threshold must be integrated into the health transfer payments. It would be good to have this in the bill.

We will ask that the bill be split so that these two distinct issues can be considered separately. This will be done in committee. We will likely move an amendment to make the $2 billion a recurring item.

That way, there would be two bills coming back to the House, one which would ensure that the $2 billion is paid to the provinces on a recurring basis and the other, which we will not support as it stands, to renew the equalization payment agreements.

In this part, an additional effort needs to be made over the weeks and months to come. It does not look very professional, in a country like this one, which claims to be a leader in public administration, to be living from hand to mouth. Next month, the provinces will be having to define what sort of budgets they will have for the coming year, and to make five year plans as well. Yet they do not know what they will be receiving from the federal government.

We have memories of episodes in the past when the Government of Quebec, no matter what party was in power, learned in February that it would be $200 million or $300 million under, or $500 million over.

This leads to terrible frustrations. When one learns that there was $500 million more that could have been spent in the previous year, on health for example, one sees a number of needs that could have been met. It would have been put to use if one had known it would be there to use, and people would have been pleased. Worse yet is the situation when amounts are taken away.

As for the part about equalization, it is estimated that a one year extension of the current formula would represent a net loss for Quebec. Consequently, we cannot support this legislative measure that would cause Quebec to suffer. Let us hope our suggestion to split the bill does not fall on deaf ears.

With respect more specifically to the equalization issue, the current formula is extremely flawed. It must be changed as soon as possible. We have been defending this point of view for some time now and we hope the government will listen.

This formula penalizes Quebec, gives the advantage to the federal government and accentuates the fiscal imbalance that has been established and recognized by a commission in Quebec. This commission is considered to be very reputable. It was chaired by Quebec's current finance minister, Mr. Séguin, who, in his current role, has noticed that what he saw in his task force he now sees on a daily basis in his responsibilities as finance minister.

Yet the government has not budged in this area. This would have been a good opportunity for the current government to stand out, but, as in other sectors, it is hard to see the difference between the practices of Mr. Chrétien and the new Prime Minister.

Nothing has changed on the equalization issue. The new finance minister flat out rejected the formula proposed by the provinces, and now we are faced with a no man's land. We do not know what exactly will happen. No solid proposals have been made.

The Bloc Quebecois is calling on the federal government to come back to the table with the provinces as quickly as possible in order to enter into a satisfactory agreement on equalization that would meet the provinces' needs.

If the new Prime Minister is serious about wanting to be more open toward Quebec and the provinces, he has a good opportunity to prove it by quickly negotiating in good faith so that the provinces will have the information they need to prepare their next budgets and plan for the next five years. That is what we would expect from a responsible federal government looking to implement a practice that is different from the one that existed under the former government.

The new administration is currently using the exact same practices the former administration used, and the provinces still have to beg for the money they need, money that taxpayers have paid in taxes, in a very complicated process.

The federal government collects taxes, much more than it needs, and gives a certain amount back to the provinces through the equalization program, but it controls everything. It can decide whether or not it will open the tap, depending on all sorts of conditions.

We witnessed that in the past. When provincial governments are not of the same political stripe as the federal government, the latter turns off the tap just in time. This means that the provincial government does not have the money to table a responsible budget and voters make that government pay the price, when in fact the one that is responsible for this situation is the federal government.

The current Minister of Finance said that the next real formula would be retroactive to April 1, 2004, so that, in the end, no one would lose.

However, at this point, this is still only a promise. There is no guarantee in the bill that the government will live up to that commitment. We do not know when the negotiation will conclude. In the meantime, the provinces have a sword of Damocles hanging over their heads, and this is why the Bloc Quebecois is opposed to the bill in its current form.

The $2 billion health transfer must be paid as quickly as possible and this must become a recurring payment.

However, there is still a lot of work to do as regards equalization. Before we give our support to an equalization formula, we want to make sure that it will benefit Quebec.

[Larry Bagnell, Liberal, Parliamentary Secretary to the Minister of Indian Affairs and Northern Development]

Mr. Speaker, to ensure that the people who are just tuning in understand this finance related bill, the equalization payments are running out at the end of the federal government's fiscal year, March 31, and we need to put a provision in place. Negotiations are underway to renew them but if the negotiations are not finished in time we need to have a stop-gap measure in place to make sure the provinces continue to get their funding.

The second part allows for the provision of the $2 billion transfer to the provinces that the Prime Minister just announced. I am sure no one would be against that. It is a very high priority among Canadians to transfer this money for health care. Health care is a high priority and I am sure everyone would be in favour of this administrative measure in the bill to transfer that money.

The finance minister is meeting with the provinces and territories later this month to continue the negotiations. People should be secure in the fact that if and when new arrangements are made they will supersede anything in the bill and will be retroactive to April 1 so that any new arrangements will be taken into account.

As the member from Newfoundland just outlined very eloquently, the provinces need the money and we must ensure that the money keeps flowing to the provinces so they can provide the essential services, such as health care and education, to their citizens.

Bill C-18 is an act respecting equalization and it authorizes the Minister of Finance to make certain payments related to health. We also have a motion for the legislation to be referred to committee.

The bill is designed to achieve two goals which relate to Canada's system of federal transfer payments. First, the bill would enable the continuation of equalization payments while the renewal legislation is finalized.

Second, the bill would provide the federal government with the authority to pay $2 billion to the provinces and territories for health, as confirmed by the Prime Minister following the recent first ministers meeting.

As my hon. colleagues are aware, the federal government, in partnership with the provinces and territories, plays a key role in supporting the Canadian health system and other social programs.

The large majority of federal transfers are delivered through four major programs: the Canada health and social transfer, equalization, territorial formula financing and the health reform transfer.

Today's bill deals only with equalization and the CHST. Collectively, these programs represent 2.4% of the nation's GDP. Another way of looking at it, and probably more relevant, is that it constitutes approximately 18% of the Government of Canada's budget. Either way, it is a significant sum of money.

I will not be talking about the territorial formula financing right now. I will be talking about the transfer to the provinces through equalization.

Equalization is a constitutional obligation that ensures that less prosperous provinces have the capacity to provide reasonably comparable levels of public services at reasonably comparable levels of taxation. It is not a program that transfers wealth among citizens.

Payments are unconditional. Receiving provinces are free to spend the funds on public services according to their own priorities. Payments are calculated according to the formula set out in the federal legislation. The formula responds to changing economic fortunes and circumstances of provinces and is designed to measure provinces' fiscal capacity relative to the average fiscal capacity of the five middle income provinces, which forms a threshold or a standard.

The formula puts 33 revenue sources in a basket to measure final capacity. Each province's fiscal capacity is measured relative to the middle wealthy five provinces.

The formula is dynamic and as revenues go up or down over the year, the average moves as does the fiscal capacity of each province. If any province has a good year, that affects equalization and, conversely, if any province has a bad year, that also affects equalization.

If a large province has a bad year, naturally there is a ripple effect. Population movement, as reflected in the 2001 census, also affects the flow of payments.

The good news is that over the past 20 years, with all the ups and downs of all the nation's provinces, there has been a slow but steady decline in fiscal disparities.

I am sure, as a nation, we would all hope for that. I am sure none of us would want to move ahead in prosperity, in our ability to take care of our families, in health care and in education if the rest of our brethren in Canada were not able to progress with us.

At the same time, equalization payments are subject to a floor provision which provides protection to the provincial governments against unexpected and large sudden decreases in equalization payments. The floor limits the amount by which a province's entitlements can decline from one year to the next.

Federal and provincial officials review the equalization program on an ongoing basis to ensure that differences in the capacity of provinces to raise revenues are measured as accurately as possible.

In addition, and central to today's debate, is the fact that equalization legislation is renewed every five years to ensure that the review is undertaken and that the integrity of fundamental objectives to the program are preserved. As I said earlier, that is exactly what is occurring right now.

The last renewal was in 1999, and the current legislation is set to expire on March 31, 2004. Discussions on the five year renewal are underway but may not take place exactly on April 1, 2004, and, of course, we would not want to have a gap in the government's administrative authority just to make these payments.

Briefly, the bill would give the Minister of Finance the authority to make these equalization payments according to the current formula for up to a year in the event that the new legislation is not in place by April 1.

The bill would ensure an uninterrupted stream of equalization payments following March 31. It is basically an insurance policy to ensure the continuation of payments while renewal legislation is finalized.

Passage of the bill will ensure the public services provinces fund equalization program will continue to be protected for the benefit of their citizens. Of course, when passed, the renewal legislation will supercede this legislation. When the full renewal legislation is passed it will be made retroactive to April 1, 2004.

The renewal legislation would ensure that the program remains up to date and that the best possible calculations and data are used to determine equalization payments.

As I indicated, until the renewal legislation is introduced and passed, hon. members should regard the measures in Bill C-18 as insurance to continue payments, given that the impacts on receiving provinces could be very significant without legislation. It really appears just administrative so I cannot imagine anyone here voting against allowing us to continue payments to the provinces.

The second part, as I said earlier, is related to health. It would allow the Prime Minister's commitment to the provinces and territories of $2 billion for health care. This constitutes 1.7% of the nation's GDP.

I could go through all this technical information on the health transfer but I do not think I will because the technicality of this has been well outlined. We just want to continue the equalization payments until a new deal is in place and to transfer the $2 billion in health care to which I am sure no one objects.

What I will do now is reinforce the whole concept of equalization. I think equalization is one of the things Canadians point to as being the greatness of our nation. All Canadians want to see each and every one of us succeed and we help each other. In my community, any time there is a tragedy or an emergency the whole community falls in behind the person or the family with the problem.

The nation works like that when one province has a difficult time. We have a nation that is probably bigger than all of Europe. It covers a huge geographic and demographic area with different cultures and economies. Anything can happen to affect any of those areas. It can be seen even more rapidly in the new global environment. Under those circumstances we want to stick together. We want to progress as a people. We want to ensure that everyone progresses together and that the rising tide raises all boats together.

Canadians are a very compassionate people and that is what equalization allows. We are all proud of that and we will make sure it continues through the bill.

[Rodger Cuzner, Liberal, Bras D'Or—Cape Breton, NS]

Mr. Speaker, it is a great pleasure to rise and speak on Bill C-18 here today and to join in this debate.

As we know and as has been stated in the House, Bill C-18 really has two aspects that will be dealt with, one aspect being the continuation of the transfer payments from the federal government to the provinces. The second aspect of this bill will allow the federal government to move the $2 billion that has been identified through the meetings with the federal officials and the Prime Minister, through the premiers to the provinces as well, specifically for health care.

We will look first at the aspect of the legislation that deals with the transfer payments. As we are aware, money flows from the federal government through the provinces in any number of ways. Four main vehicles that the federal government uses to share money with the provinces are: the Canada health and social transfer, equalization, the territorial formula financing, and the health reform transfer. The legislation being put forth today deals with equalization and the CHST.

The equalization program basically ensures that those provinces less able to provide the necessities and the essential services to its constituents are able to draw from the fund. It takes into account the revenues from the prosperous provinces. Everybody pays into equalization and then through the sharing formula it is determined which revenues are able to be taken out of this pot. It is a very complex and complicated five province formula that is applied. Through this formula, the lesser provinces, the provinces less apt to have revenues to provide basic services, are able to draw from that fund. I hold my seat in Bras d'Or--Cape Breton and the Province of Nova Scotia is one of those provinces that is a beneficiary of the equalization payments.

Some of the major inputs obviously come from the bigger provinces. When we look at a province like Ontario, we see that its revenue input is a significant amount of what we base our sharing outcomes on. Looking back and reflecting on the year that Ontario has just gone through, there is going to be somewhat of a change from past years because of the tough year Ontario experienced this year with SARS, the downturn in its tourism industry, and those struggles. This is all going to factor into the formula as well.

The original legislation was signed in 1999. As we know, the reason for the discussion, the debate and this legislation coming forward today is that it is set to lapse at the end of March. Hence, we find ourselves in a situation where the federal government wants to guarantee that the flow of cash to the provinces is not interrupted. We want to reaffirm that.

In effect, this legislation is almost like an insurance policy. Officials for the provinces and the federal government continue to negotiate and get into the nitty-gritty of the new legislation that will be put forward. What we will see, hopefully in the next short while, is that a new formula will be developed or a new agreement will be struck. At that time, legislation will be put forward which will supersede today's legislation. This is almost like interim legislation until the new deal is agreed upon between the federal government and the provinces.

The second aspect or component of this legislation is the transfer to the provinces of the very much needed health care dollars. In January, when the Prime Minister met with the premiers, and even before that, it was identified that if there were a surplus then an additional $2 billion would come from the federal coffers to be shared among the provinces.

I remember the great excitement among the premiers and some of the trepidation when we were not quite certain just what the surplus was going to be this year. We had hoped that we were going to be able to provide that $2 billion and now this legislation will make sure that the $2 billion is there and can be moved to the provinces so that they can apply it to their provincial health care systems.

Here is what we have seen in recent years. In September 2000 a reinvestment was made, with $21.5 billion reinvested in health care to the provinces. That agreement was struck between the federal government and the provinces. The federal government, because it finally got its financial house in order, was in a position where it could reinvest in those essentials that Canadians see as imperative. Obviously health care is something that Canadians take a great deal of interest in and recognize the importance of, and fortunately the federal government was able to reinvest in it in 2000. Subsequently, we have made additional investments in health care.

In my own province of Nova Scotia, when we did make the reinvestment in 2000, there was a particular envelope of money that was peeled out and identified specifically for the acquisition of hospital equipment. We can see that on the ground now back in my own constituency. I look at the Cape Breton regional health care facility, the Cape Breton Regional Hospital, and the recent acquisition of an MRI machine.

Before we made this investment in health care back in 2000, I think there were around 50 MRIs in the country. Right now we have almost 125 MRIs across Canada.

There was further investment in equipment. We have digital x-ray machines in Inverness County, in Richmond County at the Strait Richmond Hospital, and a bone densitometer in Sydney. Health care facilities were able to make these investments because the federal government put money in a specific envelope for the acquisition of health care equipment.

People who used to have to leave home and travel to Halifax for these particular treatments are now able to stay in their own communities and receive the treatments. We were very fortunate that we were able to apply the money there.

And really, what we are able to do through this legislation is provide an additional $2 billion that we will be able to transfer to the provinces for health care. It is entirely up to the provinces how they deal with the moneys through the CHST and through equalization.

We hope that the House will see the wisdom of supporting this legislation. We hope members recognize that when we look at equalization, this legislation offers itself as an insurance policy as we wait for the final agreement between the feds and the provinces. As well, we hope they see the merit in supporting this legislation because it will enable the federal government to get that $2 billion into the hands of the provinces so that we can make that reinvestment in our provincial health care programs.

[Alexa McDonough, NDP, Halifax, NS]

Mr. Speaker, I am pleased to address Bill C-18, an act respecting equalization and authorizing the Minister of Finance to make certain payments related to health.

I listened very carefully to the parliamentary secretary's comments on introducing Bill C-18. What we heard essentially was a bit of a historical account and a somewhat clinical recitation about equalization payments and the Canada health and social transfer which is a critically important part of the Canadian fiscal regime. In a way the parliamentary secretary's comments are significant not for what was included but for what was omitted.

He expressed concern and sounded ever so committed to the federal government keeping its fiscal and moral commitment to Canadians to ensure that regardless of which province people happen to live in they will be entitled to a roughly comparable level of service in the vital areas of health, education, child care and so on.

What the parliamentary secretary failed to say despite this show of concern is that the government has been so unwilling to see it as a priority to ensure not just that equalization payments continue but that there be a fair formula for equalization payments. The government has been dragging its feet and the current regime expires at the end of March. It has had five years to negotiate a renewal agreement that would be more fair and more effective.

What we are dealing with here is a stop-gap measure. We are dealing with a bill that is necessitated because the government has not seen it as enough of a priority to work in good faith with the provinces to put in place the new formula for equalization which is desperately needed and long overdue.

We know that the provinces have been working hard and in good faith to put forward a new formula. We heard from the parliamentary secretary about how the old formula works. What he did not say is that a very specific proposal has been brokered and worked on over a period of years that is based on a 10 provinces agreement and a 10 provinces formula.

The federal government has not been willing to come to an agreement about that new improved formula. Why? Despite the expression of concern about the inadequacy and deterioration of services across this country as a result of federal policies over the last 10 years, it seems content to continue using the same formula because it saves the government money. It needs to find ways to save money no matter whether it comes out of the hides of Canadians who are the most vulnerable in this country or wherever the government can find it because we know what the government's priorities are.

When the government decides that a corporate tax cut of $4.4 billion comes first, then no wonder it is avoiding entering into a good faith agreement with the provinces that would allow the equalization funds to be more adequate and more fair.

So much for the notion that the Prime Minister can claim that it is a new, different and better government. What we see by the introduction of this bill today is simply an admission of failure. It is a revelation of how vacuous the Prime Minister's claim is that he is a Prime Minister that has a much improved working relationship with our premiers.

There is more to having an improved working relationship with our premiers than going to a football game with the boys. There is no question it is a good photo op and it is smart to come out of the starting gate saying that he is getting together with the premiers so they can just get along better.

I would not presume to speak for any premier. However, I think one could say without fear of contradiction that the vast majority of the premiers would be a lot more impressed with the supposed commitment of the new Prime Minister to work in better harmony and good faith with them if the government had moved to endorse the 10 province formula. That formula was worked on over a very long period of time. If it could be in place so that it took effect April 1 we would not need this stop-gap legislation.

Let us make no mistake about it. It is not going to be missed on Canadians why this stop-gap legislation is needed. It is needed because when it comes to the fiscal regime and equalization, the new Prime Minister and the new finance minister have behaved no differently, no more responsibly, no more in response to the need for change by the provinces than the old regime, the previous finance minister and the old prime minister. And I do not mean old in years, I mean old in terms of chronology.

I want to refer to the second part of the bill which is to deal with the $2 billion that we hear trumpeted as a great achievement of the new Prime Minister. Let us not be that easily taken in by the notion that the $2 billion desperately needed for health care was an option and the Prime Minister might have said, “We are not going to do that after all because we do not have enough money”.

We have heard all the posturing from the new Prime Minister, the new finance minister and the other cheerleaders for the new regime. They are saying that they have to be fiscally responsible, that they may not have that $2 billion that was absolutely recommended as the rock bottom measure. That was the first measure needed to begin to make up for the money that was lost, that was clawed back by the federal government, that was held back from the health and social transfer over the last several years.

There was not an option, not unless the new government, the new Prime Minister and the new finance minister wanted to engage in a massive kamikaze effort here. It is clear that health care is the number one priority of Canadians. It is clear that the loss of those dollars at the insistence of the former finance minister, who now happens to be the Prime Minister, has very severely eroded the quality of health care, particularly in have not provinces like my own, Nova Scotia, and in the other six have not provinces. It has made it very clear that the provinces have to carry the load. They have to bear the burden of the elimination of much of the federal funding for health care over the last several years.

It is not surprising that the premier of Nova Scotia has said that the $2 billion clearly is not sufficient to deal with the horrendous waiting lists for specialist services and diagnostic services. It is not sufficient to deal with the log-jam at emergency hospital rooms. It is not sufficient to deal with the damage done over the last nine years because of the former finance minister's budgets.

What is absolutely clear is that even with the $2 billion granted, it does not begin to close the Romanow gap. When the Romanow report on the future of Canada's health care was presented, it was absolutely clear that there was a need for changes to the equalization formulas. There was a need to address many of the other aspects of the health care system which had been badly damaged by the government's misplaced priorities.

In conclusion, there is no indication whatsoever with Bill C-18 that the government is seriously committed to creating a fairer, more effective equalization regime. There is no indication that the government will begin to do what is needed to put in place the kind of health care system that Romanow recommended, that was put before the Canadian people. Health care remains the number one priority for Canadians.

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, I am pleased to rise today to speak to this bill. I find it very symbolic and very representative of the kind of stunts this government, the Liberals and this Prime Minister seem to enjoy playing. Of course, this is to be expected just before an election. Bill C-18 is basically a partisan piece of legislation that goes against the interest of Quebec and the rest of the provinces.

First, in Bill C-18, two distinct components have been combined. The first one deals with extending the current equalization program that the provinces, and Quebec in particular, do not like and have been criticizing. The second one is to approve the $2 billion that was first promised to the provinces by Jean Chrétien and then by the former finance minister and that will probably be paid by the current Prime Minister.

On the one hand, we are against the extension of the current equalization program, because it penalizes Quebec and Atlantic Canada, in particular. On the other hand, we agree with the $2 billion for health promised by Jean Chrétien. The government thinks it can fool of us by coercing us to vote in favour of a bill that would penalize Quebec and Atlantic Canada over the next fiscal year. It is not fooling anyone, not the people of Quebec and not the Bloc Quebecois.

We demand that this bill be split. While we are in favour of Bill C-18 being referred to a committee, we will be bringing forward in committee an amendment to split the bill into two very distinct parts, as I mentioned earlier. So much for the first stunt.

Second, by introducing a bill that would extend the equalization program and provide an additional $2 billion for health, as promised over and over again, the federal government would have us believe that it is being very generous and that the provinces will be the big winners here. That is not true.

In this fiscal year alone, federal transfer payments to Quebec have been cut by about 5%. That means $423 million less in Quebec's coffers, even with the $2 billion, of which Quebec will receive $472 million.

We are not stupid. The federal government is financially starving the provinces, especially Quebec. Next year, if the equalization formula is maintained and if there is no agreement to increase health care funding, transfer payments to Quebec will drop by $1.55 billion. This is unacceptable. We will not allow Ottawa to financially starve the Quebec government at the expense of Quebeckers. We will not endorse this.

Third, the federal government is making a big deal about the $2 billion it is transferring for health care but has failed to mention that this year it will save $2 billion in equalization payments. That is the federal government's strategy: to take with one hand and give with the other. The problem is that the rules are not the same when it comes to equalization or the CHST.

The CHST is based on population percentage. Equalization, however, is based on the relative wealth of the provinces. Consequently, Quebec and the Atlantic provinces lose under Bill C-18. The proof is that, this year, under the equalization program, our share of the 2002-03 amount will drop 38%. These figures bear repeating because they are evidence of this third stunt pulled by the Liberals and the federal government.

The figures I am providing are from the study by Quebec's finance minister, Mr. Séguin, who is far from being a separatist, as the Liberals say, and who should have a certain credibility in their eyes. In 2002-03, under the equalization program, Quebec received $5.315 billion. In 2003-04, the current fiscal year, it received $3.29 billion. That is a 38.1% decrease. Projections for next year are approximately $3.5 billion. Compared to 2002-03, this is a 34.1% decrease.

And now they are trying to sell us on the idea of extending the current equalization formula at the expense of Quebec's finances. This is unthinkable.

Looking at the Canada health and social transfer, we see that in 2002-03 we received $2.648 billion. In 2003-04 we received $2.58 billion, a drop of 2.6%.

This year there is of course the increase provided for in the February 2002 agreement plus the $2 billion, which means for Quebec a total of $1.647 billion. And there is $1.367 billion in other transfers. So this year Quebec will receive in federal transfer payments $8.884 billion compared to the $9.3 received in 2002-03. That is a net loss of 4.5%.

They want the Bloc Quebecois, the sole defender of the interests of Quebec in this House, to accept such a unilateral reduction in transfer payments by the government. Next year, again compared to 2002-03, according to our very conservative estimate, the losses will be in the order of 16.7%.

We therefore cannot accept the sort of stunt they are trying to pull with Bill C-18, which will, when all is said and done, penalize Quebec and the Atlantic provinces in particular, as I have said, by strangling them financially.

We can see, since the numbers are there, that the basic intent of Bill C-18 is to allow the federal government to save money. The $2 billion—which, I will remind hon. members, is $2 billion with no guarantee of repetition next year, far from it—is merely an attempt to conceal what they are doing. This is why they have put the two elements into Bill C-18. But, once again, we are not taken in, nor are the people of Quebec.

Fourth, since there has been a new prime minister, since there has been a new finance minister, they have copied the tactics of the former finance minister, now Prime Minister.

They claim the financial situation is very difficult, pointing to examples of current issues that are indeed of great concern: the mad cow crisis, which the federal government should come up with more money for, the SARS crisis, and a number of other things such as the power outage in Ontario.

The government says finances will be very tight now. It expects to have a lot of difficulty raising $2.3 billion in surpluses. What did we learn this week? From April to December, the federal government already raised $5.2 billion. The surplus will be closer to $6 billion or $7 billion, as the Bloc Quebecois predicted earlier.

Consequently, the federal government put up a show to try to relieve the pressure on the negotiations concerning equalization and health. When he met with provincial premiers, the Prime Minister said, “I will not solve the problem now. I will wait until July”.

Why will he wait until July? Because he hopes to hold his election before then. Of course, I am not convinced that, with the current events, it will be easy. However, at the time, his idea was to call an election as soon as possible and postpone the problems.

It is the same with Bill C-18. The government does not want a debate, it does not want to negotiate the equalization formula with the provinces. It is downloading, hoping that the election will be held before then.

In an attempt to cover all this, it is pretending that it is having financial problems, which is false. Not only there are surpluses, but there is $6 billion sitting in the foundations that were created by the current Prime Minister.

We know that Jacques Léonard, the former president of the Treasury Board in Quebec, did a wonderful job for the Bloc Quebecois. He showed that the federal government had increased its spending at a pace that was double that of Quebec and Ontario, and that there was a lot of waste. It is not just the sponsorship scandal; there is also a culture of waste within the federal government. If things were tightened up, we would have ample means to settle the issue and negotiate quickly.

Fifth, all this is done with one goal in mind, which is to put all the problems off until after the election. Afterwards, the government will give the bad news to Quebec and to the other provinces.

We will not be fooled. We will not play this game. We will not condone what the Liberals want to do to the provinces and to Quebec in particular, which is to put a financial stranglehold on them and not deal with the fiscal imbalance.

Nor will we condone the laxness of this government, which could easily have negotiated the new equalization rules before March 31. We will not play this game and we will not support Bill C-18.

We hope that this bill will be split and that the issue of the $2 billion for health will be addressed separately.

As I said, we will ask that the $2 billion be a recurrent amount and that the equalization program be extended before March 31 if possible, but in any case before the election.

In conclusion, we will support the referral of this bill to the Standing Committee on Finance.

[John McKay, Liberal, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, it is my pleasure today to rise on Bill C-18, an act respecting equalization and to authorize the Minister of Finance to make certain payments with respect to health, and to support the motion that the legislation be referred to committee.

The bill is designed to achieve two goals. First, the bill would enable the continuation of the equalization payments while the renewal legislation is being finalized. Second, the bill would provide the federal government with the authority to pay $2 billion to the provinces and territories for health, as confirmed by the Prime Minister following the first minister's meeting.

My hon. colleagues are aware that the federal government is in a partnership with the provinces and territories and it plays a key role in supporting the Canadian health system and social programs.

The large majority of federal transfers are delivered through four major programs: the CHST, the Canada health and social transfer; the equalization payments; the territorial formula financing; and the new health transfer.

The bill today only deals with equalization and CHST. However, collectively, those four programs actually represent 2.4% of the nation's GDP, a significant sum of money by anyone's standard and constitute 18% of the government's revenues.

The equalization program is a constitutional obligation that ensures that less prosperous provinces have the capacity to provide reasonably comparable public services according to their levels of ability. It is not a program that transfers wealth among citizens.

Payments are unconditional. Receiving provinces are free to spend the funds on public services according to their own priorities. Payments are calculated according to a formula set out in federal legislation. The formula responds to the changing economic fortunes and circumstances of each province. It is designed to measure a province's fiscal capacity relative to the average fiscal capacity of the five middle income provinces, which forms the threshold standard.

The formula puts 33 revenue sources in a basket to measure fiscal capacity. Each province's fiscal capacity is measured relative to the middle wealthy five provinces.

The formula is dynamic and, as revenues go up or go down over the year, the average moves as does the fiscal capacity of each province. If any province has a good year, that affects equalization and, conversely, if any province has a bad year, so also is equalization affected.

If a large province has a bad year, naturally there is a ripple effect. Population movement, as reflected in the 2001 census, also affects the flow of payments.

The good news is that over the past 20 years, with all the ups and downs of the nation's provinces, there has been a slow but steady narrowing in the fiscal disparities.

At the same time, equalization payments are subject to a floor provision, which provides protection to provincial governments against unexpected large and sudden decreases in equalization payments. The floor limits the amount by which a province's entitlements can decline from one year to the next.

Federal and provincial officials review the equalization program on an ongoing basis to make sure that differences in the capacity of provinces to raise revenues are measured as accurately as possible.

In addition, and central to today's debate, is the fact that equalization legislation is renewed every five years to ensure that this review is undertaken and that the integrity and fundamental objectives of the program are preserved. The last renewal was in 1999. The current legislation is set to expire on March 31, 2004.

Discussions on the full five year renewal of the equalization program are underway but may not be set by April 1, 2004, which would leave a gap in the government's authority to make equalization payments.

Briefly, the bill before us today would provide the Minister of Finance with the authority to continue to make the equalization payments according to the current formula for up to a year in the event that the new legislation is not ready before April 1.

The bill would ensure an uninterrupted stream of equalization payments following March 31. It is basically an insurance policy to ensure the continuation of payments while renewal legislation is finalized.

Passage of the bill would ensure that public services provinces fund through the equalization program will continue to be protected for the benefit of their citizens.

Of course, when passed, the renewal legislation would supercede this extension. When the full renewal legislation is passed it will be retroactive to April 1, 2004. The renewal legislation would ensure that the program remains up to date and that the best possible calculations and data are used to determine equalization payments.

As I indicated, until the renewal legislation is introduced and passed, hon. members should regard the measures in Bill C-18 as insurance to continue payments and minimize the impacts upon the receiving provinces.

I want to turn now to the other provision in Bill C-18, which is the Prime Minister's commitment to provide a further $2 billion to the provinces and territories for health.

As the largest federal transfer, the CHST provides provinces and territories with cash payments and tax transfers in support of health care, post-secondary education, social assistance and social services, including early childhood development and early learning and child care. It constitutes 1.7% of the nation's GDP.

Since the CHST was created in 1996, the federal government has strengthened the transfer numerous times and it will continue to be a key priority for the government.

Let me take a moment to review the major funding increases.

In September 2000, Canada's first ministers reached a five year health renewal agreement under which the federal government made its largest ever increase to the CHST. The September 2000 agreement provided $21.1 billion to the provinces and territories for health care and early childhood development, bringing CHST payments to their highest levels ever. To support the agreement, the federal government also provided an additional $2.3 billion in targeted advancements for medical equipment, primary care reform and new information technologies such as electronic patient records.

When that money came to the hospitals in my riding the CEO of that hospital identified information technologies as his critical need and, in some direct measure, the federal government responded to that.

Drawing on the commitments supporting reform and renewal outlined in 2000, the 2003 budget confirmed $34.8 billion in increased funding over five years to meet the goals outlined in the 2003 health accord.

As a result of the investments I have just outlined, in 2003-04 the federal will provide a total of $37.9 billion in support to the provinces and territories through the CHST.

That brings me to the second measure in the bill, which is the $2 billion from the consolidated revenue fund in 2003-04 for health.

Additional funding for health care was committed under the 2003 health accord where the government indicated that in an addition to $34.8 billion over five years, it would provide an additional $2 billion for health at the end of the fiscal year 2003-04 if the Minister of Finance determined during the month of January 2004 that there would be sufficient surplus above the normal contingency reserve to permit such an investment. The commitment was reiterated in the February 2003 budget and again in the November 2003 economic update.

This government intends to live up to that commitment. This money is in addition to the increased federal investment of $17.3 billion over three years and the $34.8 billion over five years already confirmed.

The passage of the bill before the end of the fiscal year will provide provinces and territories with the flexibility to begin drawing down these funds as they require, which will help them better plan for the future.

The bill would ensure that Canada's health care system continues to be, in the words of the Prime Minister, “A proud example of our national values at work”.

In considering the equalization measures of the bill, I urge hon. members to also keep in mind that the bill underscores the priority the government places on equalization and ensures uninterrupted funding until renewal legislation is in place. This would ensure that the receiving provinces continue to receive the resources they need.

I encourage hon. members to support the motion.

[Mauril Bélanger, Liberal, Deputy Leader of the Government in the House of Commons]

Mr. Speaker, discussions have taken place between all parties and if you were to seek it, I think you would find consent of the House to adopt the following motion:

That if a recorded division is requested on the motion to refer Bill C-18 to committee before second reading, it be deferred to 5:30 p.m. on Tuesday, February 17, 2004.

[Aileen Carroll, Liberal, for the Minister of Finance]

moved:

That Bill C-18, an act respecting equalization and authorizing the Minister of Finance to make certain payments related to health be immediately referred to the Standing Committee on Finance.

Act to amend the Radiocommunication Act

[The Deputy Speaker]

Pursuant to order made earlier today, the division stands deferred until Tuesday, February 17 at 5:30 p.m.

Bill C-18. On the order: Government Orders

February 12, 2004—The Minister of Finance—Second reading and reference to the Standing Committee on Finance of Bill C-18, an act respecting equalization and authorizing the Minister of Finance to make certain payments related to health.

Federal-Provincial Fiscal Arrangements Act

[Jacques Saada, Liberal, for the Minister of Finance]

moved for leave to introduce Bill C-18, an act respecting equalization and authorizing the Minister of Finance to make certain payments related to health.

(Motions deemed adopted, bill read the first time and printed)

Reinstatement of Government Bills

[Dennis Mills, Liberal, Toronto—Danforth, ON]

Mr. Speaker, I want to begin by saying through you to the member for Rimouski--Neigette-et-la Mitis that as long as she is present in the House of Commons, Quebec's voice will never be diluted. As I reflect back over the last 16 years I have served in this chamber, one of my special joys has been meeting members from different parties for whom I feel great admiration for the work they do. The member is one of the special contributors to helping this place be a better place.

On the point of the motion, I humbly disagree with my colleague from the Bloc Québécois. It is important that we let Canadians know what we are trying to achieve. It is an easy thing to pick and choose the bills that we are trying to reintroduce to the House in this motion.

I heard one of the members from the new Conservative Party this morning put a big focus on Bill C-38, the marijuana bill. This is not about reintroducing just the marijuana bill. There are a number of bills on this motion that we are trying to reintroduce.

We should tell Canadians the reason we are trying to reintroduce these bills that lapsed in the last session is we want to pick up where we left off, especially with those bills on which we probably have a consensus, such as: Bill C-10B, cruelty to animals, which I will come back to in a minute; Bill C-17, public safety; Bill C-18, an act respecting Canadian citizenship; Bill C-20, protection of children; Bill C-26, the railway safety act; Bill C-33, international transfer of persons found guilty of criminal offences; Bill C-43, the Fisheries Act; Bill C-52, the Radiocommunication Act; and Bill C-56, an act to amend the Patent Act and the Food and Drugs Act. There are many more like these bills.

If we are going to be candid with the Canadian public who are listening to this debate today, we have to let them know that it has been a convention for hundreds of years that in a new session the government has up to 30 days to introduce bills that died on the Order Paper when the previous session ended. This is a convention that has long been practised. It does not mean that when these bills come back we will vote on them all at once. Members will have a chance to say yea or nay on each individual bill.

The idea of delaying this has an adverse effect on citizens in every riding of the country. Some of those bills touch every riding in the country. A case could be made on the electoral boundaries. We all know what that is about. That is an attempt to delay the election. I personally would not have any problem if we delayed the election for a while, but the reality is that we will have a chance to vote yea or nay on all of these bills when they come back. I do not think this delay tactic serves the opposition party well.

I want to talk about a very specific bill on the Order Paper that has concern in my riding and has had national attention in the last couple of weeks. It is Bill C-10B, cruelty to animals.

As hon. members may know, Withrow Park is in my riding. It is a fairly large park. It certainly would not be large by the standards of the member for Rimouski, but in my little community in downtown Toronto, Withrow Park is a major park and is probably about 10 to 15 acres big. About two weeks ago someone put poison in the park where people walk their dogs and from time to time let the dogs off the leash. The one that hit national media was T-Bone, a King Charles spaniel. He was quite well known.

In my constituency there are over 10,000 pet owners. Those pets are sources of comfort and have special relationships with many of the seniors and families in my riding. The attachment, the love and the affection for these animals is in many respects similar to that of parents with children. The notion that someone would drop poison is overwhelming. In fact the poison is not even available in Canada; it can only be obtained by licence in the United States.

It is that kind of insensitivity with which a bill like Bill C-10 deals. The notion that this House would work at delaying reintroducing a bill like that is not in my mind a constructive way to go.

I am hoping that through the motion that is on the floor today we can create some new consensus so that we can move forward on getting these bills back on track.

A lot of people would feel pretty anxious if an election was upon us and we let a lot of these bills die before the election. When we came back, I believe we would have to go through the entire process again. What is that process? Probably a lot of Canadians do not realize that hours and hours go into getting a bill to this stage. Witnesses come to the various committees of the House of Commons and give members of Parliament from all parties expert advice on designing the bills.

In the manufacture, preparation and formulation of a piece of legislation in the House, we do not just snap our fingers and a bill is put together by the legislative branch. Bills are built after receiving hundreds of hours of input from citizens across Canada. Some of them use their own money to come here to give expert testimony. The House of Commons committee system funds some of them to come here. The notion that we would just scrap all of that work is most disrespectful to the work of all of those witnesses we have heard with respect to the 40 or 50 bills that we are trying to put back on the Order Paper.

I would appeal to the leadership of the Conservative Party and the leadership of the NDP. The NDP should take a strong stand on this because I know there are bills here on which the NDP has had a strong influence. Those members should stand and say they support the government in moving these bills forward.

There are bills that affect every region of our country, such as the administration and accountability of Indian bands. Look at all the great work that went into putting that bill together. Look at all the travel time from every region of the country, especially the long distances from the north. Look at the ethics bill. How could the opposition not want us to proceed on the ethics bill? There is also the whole area of the Food and Drugs Act.

These are bills that affect the health of the citizens of every riding in the country. The notion that there would be opposition to bringing these bills back and passing them is counterproductive. It is part of the reason that people lose trust in this place, because stalling just for the sake of stalling I do not think serves anyone very well.

[Roy Cullen, Liberal, Etobicoke North, ON]

Mr. Speaker, the motion seeks to reinstate bills that died on the Order Paper when the previous session of Parliament ended.

As all of us know, the goal of the motion is a simple one: to spare members the burden of having to repeat work on bills that got as far as the committee stage in the last session.

This is especially commendable given the numerous pressures MPs are under and the limited resources available to us.

What features are contained in the motion? Simply put, under the motion a minister would be able to request during 30 sitting days after the motion's adoption the reinstatement of a bill that had reached at least the committee stage when the last session ended. Should the Speaker be satisfied that the bill is the same as in the previous session, the bill would be reinstated at the same stage as before.

Thus during this session we can skip all the stages of debate that have been completed so far. The work of the committees that are considering the bills would consequently be preserved. In short, this is a very appealing option.

Parliament relies heavily upon precedents which means we are constantly looking over our shoulder to ensure new measures are consistent with past practices. Is this motion in keeping with the longstanding practices of the House? It is in fact a practice we have had for over three decades.

On a number of occasions reinstatement motions have been adopted by consent and without debate. It is clear that today's motion is well within the bounds of accepted parliamentary practice. This is supported by Marleau and Montpetit's authoritative guide to parliamentary procedure which discusses this issue in some detail. While they recognize that as a general principle prorogation of a session means that all bills that have not yet received royal assent die on the Order Paper and must be reintroduced in the new session, they also recognize that “bills have been reinstated by motion at the start of a new session at the same stage they had reached at the end of the previous session; committee work has similarly been revived”.

One point that needs clarification is that this motion allows the government the flexibility to reintroduce certain bills. It does not require the government to reintroduce all bills that were on the Order Paper at a certain stage when Parliament prorogued. Let me give an example of some bills which the government would have the flexibility to reinstate if it so chose.

One is Bill C-7 on the administration and accountability of Indian bands. The new government has indicated it would like to revisit that whole question of governance but nonetheless, this motion would give the government the flexibility to reintroduce that bill should it so choose.

Another one is Bill C-10B on cruelty to animals which has received a lot of attention in my riding. Bill C-13, assisted human reproduction, as an example had passed third reading and had been sent to the Senate and a great deal of the work that had been done here in the House of Commons would have to be redone. Bill C-17 on public safety was another bill that had passed third reading and had been sent to the Senate.

Bill C-18, an act respecting Canadian citizenship, is another bill that the government if this motion passes will be able to reintroduce if it so chooses. Bill C-19, first nations fiscal management, was at report stage. Bill C-20, protection of children, was at report stage. Bill C-22, the Divorce Act, was in committee. Bill C-23, registration of information relating to sex offenders, had passed third reading and had been sent to the Senate. Bill C-26, the Railway Safety Act, was in committee. Bill C-27 on airport authorities was at second reading when the House prorogued.

Bill C-32, Criminal Code amendments, had passed third reading and had been sent to the Senate. Bill C-33, international transfer of persons found guilty of criminal offences, was at report stage when we prorogued. Bill C-34, ethics, had passed third reading and had been sent to the Senate where it had been amended.

These are bills that have gone through a lengthy debate and process within the House of Commons and some already within the Senate.

Bill C-35, remuneration of military judges, had passed third reading and had been sent to the Senate. Bill C-36, Archives of Canada, had passed third reading and had been sent to the Senate. Bill C-38, the marijuana bill, was at report stage and second reading. Bill C-40, Corrections and Conditional Release Act, was at first reading when the House prorogued. Bill C-43, the fisheries act, was at first reading when the House prorogued.

Bill C-46, the capital markets fraud bill, had passed third reading and had been sent to the Senate. This is a bill that will help the government deal with the kind of corporate fraud that we have seen with Enron and many other examples. We want to make sure that our government has the ability to deal with these types of issues so that investors are protected from the fraudulent activities of the management of various companies and their directors.

Bill C-49, the electoral boundaries act had passed third reading and was in the Senate.

Bill C-51, the Canada Elections Act, and Bill C-52, the Radiocommunication Act, were at second reading when the House prorogued. Bill C-53, the riding name changes, had passed third reading and was sent to the Senate. Bill C-54, the Federal-Provincial Fiscal Arrangements Act was in committee as was Bill C-56, the Food and Drugs Act, when the House prorogued. Bill C-57, the westbank first nation self-government act was also in committee.

There was a lot of work involved in getting these bills to this stage. The government is not necessarily committing to reintroducing all these bills, but we want the flexibility to reintroduce those bills which we support and not have to reinvent the wheel.

The amendment put forward by the member for Yorkton--Melville indicates that there are a number of bills that, given the government's flexibility, he would not like to have reinstated. That includes Bill C-7, the bill dealing with the administration and accountability of Indian bands. Our government may want to revisit that bill.

The member for Yorkton--Melville has said that Bill C-13, the assisted human reproduction bill, should be left alone as well. He names a number of other bills such as Bill C-19, Bill C-20, Bill C-22, Bill C-26, Bill C-34, Bill C-35, Bill C-36, Bill C-38.

I should point out that a number of these bills, Bill C-13 for example, passed third reading and was in the Senate.The member for Yorkton--Melville wants us to start all over with that bill.

He said that Bill C-34, the ethics legislation, should not be reinstated, yet that bill had passed third reading and was sent to the Senate where it had been amended. We all know about that bill.

He said that we should start all over again with regard to Bill C-35, remuneration for military judges legislation. That bill had passed third reading and was in the Senate,.

I do not know what is so contentious with regard to Bill C-36, the archives of Canada legislation, but the member for Yorkton--Melville wants us to start all over again with that bill. Bill C-38, the marijuana bill, was at report stage.

A lot of work has already been done in this chamber and in the other place on bills that, without the passage of this motion, would have to be started all over again. There is a long list of precedents for reinstating government bills and reviving committee work.

For example, in 1970, 1972, 1974 and 1986, the members of this House gave their unanimous consent to a motion to reinstate bills from a previous session.

In 1977 and 1982 members amended the Standing Orders to allow Parliament to carry over legislation to the next session. All of which testifies to the longstanding practice of the House of allowing the reinstatement of bills at the same stage as was the case in the previous session, which is precisely what the motion calls for.

It is interesting to note, and I have some personal interaction with this particular idea, that the procedure proposed in the motion is similar, in fact it is identical, to that which exists in the Standing Orders for private members' bills which the House adopted in 1998.

I have a private member's bill, Bill C-212, an act respecting user fees, that unanimously passed all stages in the House, was in the Senate, had passed first reading in the Senate and had been referred to the Senate Standing Committee on National Finance. Then we prorogued. Without this particular feature, I would have had to start all over again in the House of Commons after two to three years of work and a bill that had passed unanimously at all stages in the House of Commons.

With this particular Standing Order, the bill is already on the floor of the Senate. We did not have to reinvent the wheel here in the House of Commons. I am hopeful that it will be passed to the Standing Committee on National Finance shortly and then onwards from there.

We say that those rules are good for private member's bills, in fact they have the support of the House because they are now part of the Standing Orders. We say, on the one hand for private members' business, it is all right to reinstate these bills, but for the government's business it is not, this is a whole new thing.

The member opposite said that if we have a new government then why do we not have new ideas. I can assure the member that if he read the throne speech, and if he looked at the new democratic deficit paper, this is just the start. He will see that the government will be operated very differently.

However, having said that, there is no problem in my judgment to reintroduce those bills that make sense. There has been a lot of work done already. With this motion, the government would have the flexibility to deal with these bills that have been passed, where there is consent of the House, and send them to the Senate.

It is interesting to note that in 1977, a private member's bill was reinstated after Parliament was dissolved.

All of which inevitably leads us to the conclusion, as I said earlier, that if it is reasonable to reinstate private members' bills at the same stage, surely we have the common sense in this chamber to say that it is reasonable to follow the same procedure with respect to government bills.

What would be different about government bills? If we have adopted the procedure in the House for private members' business, why would we want different rules for government business, unless we are out to score political points or be partisan in our debate?

I should point out that this practice of reinstating bills is also practised in other mature democracies that have ruled in favour of bringing legislation forward from one session to another.

I think of the parliament in the United Kingdom from which many of our own parliamentary practices originally came. It has reinstatement motions to allow government bills to carry over from one session to the next.

The official opposition has told the media that it would oppose the motion for the sole purpose of delaying bills from the last session. This is patently unfair and contrary to House practices. The attitude shows it has little regard for the work of the House and for Canadian taxpayers. Opposition members will ask members of the House, at great cost to the public treasury, to come back and re-debate bills that have already passed this chamber and are in the Senate in many cases.

The bills that will be reinstated would include the legislation to accelerate the coming into force of the new electoral boundaries which was passed by the House of Commons and sent to the Senate.

We talk about dealing with western alienation. This particular legislation would allow more seats for British Columbia and Alberta. This is the way to proceed. Why would we want to delay that bill? Why would we want to have the debate all over again on something that is patently obvious.

We take the census and figure it all out, and draw the boundaries. This is not rocket science. This is done by Elections Canada. It redefines the boundaries. It recognizes that Canada is a growing country, that different areas are growing more quickly than others, and it redefines the boundaries.

If we have that bill when the next election is called, Alberta and British Columbia will have a bigger voice. I think Ontario would receive more seats as well. I am sure that there could be an amendment that could be put forward to deal with Nova Scotia perhaps.

There is the legislation to create an independent ethics commissioner and a Senate ethics officer, something that the members opposite have argued for vociferously for months, perhaps years. This bill could be reinstated very simply by agreeing and adopting this motion. We could have an independent ethics commissioner for the House and a Senate ethics officer.

The motion should have the support of the House. It is the practice in most mature democratic countries.

In conclusion, we need to be clear that adoption of the motion does not mean that all the bills that were on the Order Paper when we prorogued would automatically come back. It means that the government would have the flexibility to pick those bills that, in its wisdom and judgment, it sees fit to bring back. That would allow us not to have to reinvent the wheel and re-debate those bills that have the support of the chamber. Many of them also have the support of the Senate, at least at first reading stage.

The motion before us today does not represent a break with our parliamentary traditions. In fact, it is very much a part of our parliamentary traditions and it is entirely consistent with the practice of the House dating back to 1970.

Moreover, the measures described in the motion would greatly contribute to freeing up the members so that they can focus on the important task of developing new initiatives for promoting the well-being of Canadians.

With this in mind, I certainly intend to support this motion. I would urge other members to support it so we can get on with the business of the House, the important business and legislation that can be brought forward and reinstated and not have to be re-debated.